The statistical number of unbanked individuals around the globe is alarming. In fact, this population happens to make up a total of 1.7 bn adults worldwide. By boosting financial inclusion, we would be able to unlock countless opportunities. Studies and use cases have shown how peoples financial lives and even whole economies were affected positively.
Financial Inclusion offers the definition that individuals and businesses have the right to access useful and affordable financial services that suit their needs, as well as to have these services delivered reliably and sustainably. By holding a bank account, you achieve the minimum requirements. Unbanked is a term used to categorise adults that do not utilise banking institutions in any way. Some barriers to becoming a “banked individual” include not having any nearby branches to visit, as well as a lack of safe routes to travel to these branches. This is a challenging reality for many in emerging markets.
Why is financial inclusion such a big deal? Every individual – no matter who and where they are, has an inherent right to get their basic needs met – without question. In the 21st Century, this calls for access to basic financial products and services. The benefits financial security brings are plenty; individuals experience greater financial stability, freedom, and happiness – to name a few. On top of this, by reducing the number of unbanked individuals; developing countries GDP’s flourish as well as the global economy.
The future is already here: Smartphones! Emerging markets and their individuals are now able to transform their financial stories for a more confident and brighter reality.
“In the Philippines for example, only 34.5% of the population have a bank account, but for every person, there are 1.59 mobile phones and 67% of the population are active social media users displaying a clear disparity in the way data is being generated and how it is being used.” – Acuant, 2020
By taking advantage of what many unbanked individuals already have access to; an easy solution to improve financial inclusion was unveiled: financial services through the use of smartphones. New forces are at play to disrupt the cross-border payments ecosystem; specifically focusing on small-value transactions which directly affect individual consumer behavior. If anything is true, it is the fact that our individual consumer behavior is a vital building block that shapes our lives. Thus, particularly important in achieving financial inclusion.
“By 2017, 69% of the world’s population had a bank account and/or mobile wallet, up from 62% in 2014.”
Financial inclusion is progressing. We can either let time run its course – dictating the untapped financial potential of billions, or we can seize this tremendous opportunity to pave the way to accessible micro-finance for unbanked communities. Transforming the world and the lives in it, one small-value transaction at a time.