EY and the Confederation of Indian Industry (CII) reveals that Unified Payments Interface (UPI) has become the most preferred mode of financial transactions in rural and semi-urban India. The report, titled ‘Financial Inclusion through Technology and Literacy in India: Strategies for Sustainable Growth,’ was launched at CII’s Annual Technology Summit in New Delhi. Surveying 1,033 respondents, the report found that 38% of participants in rural and semi-urban areas now use UPI as their primary payment method, with a higher preference among individuals aged 18 to 35. Despite this digital shift, 19% of respondents still rely solely on cash, and 11% showed a lack of interest in using UPI.
The report also highlights a strong culture of savings in these regions, with 96% of respondents expressing a desire to save and invest, presenting opportunities for financial institutions to introduce tailored products. Additionally, 55% of participants expressed interest in improving their financial management knowledge, including savings, budgeting, loans, and insurance. However, traditional banking remains dominant, with 86% of rural and semi-urban account holders preferring to visit physical bank branches for transactions, and 60% relying on formal banking channels for loans. The report also highlights a significant gender gap in financial literacy, with 69% of women using digital banking services but only 44% engaging in regular transactions. Many women are also unaware of key government financial inclusion initiatives such as PMJDY and APY.
The report stresses the importance of financial inclusion in India’s journey towards becoming a $5 trillion economy. Saurabh Chandra, Senior Partner at EY India, emphasized that the findings create an opportunity for financial institutions to offer innovative solutions, particularly in rural and semi-urban areas where people are keen to improve their financial literacy. The report advocates for building a tech-driven financial ecosystem, using AI and automation to deliver secure, personalized financial services. It calls for collaboration between financial institutions, policymakers, and technology providers to drive financial inclusion and sustainable growth, focusing on empowering underbanked communities and improving access to financial services through technology and literacy programs.