To end world poverty, it’s time we banked the unbanked.
Well, that’s the combined populations of both the US and Europe. This type of financial exclusion hampers any prospect for socioeconomic advancement, impedes economic growth, keeps a tremendous amount of people in poverty, and fuels political destabilization. In short, being unbanked, being excluded from existing financial services, threatens world peace and prosperity.
They used to say that “Where there’s a will, there’s a way. Today, it’s better stated as “Where there’s a will AND the technology, there’s a way.” Ending global poverty and fueling economic growth relies on financial inclusion so that the masses of the unbanked are able to become “banked.” Digital technologies will be pivotal in the creation of financial ecosystems for the 1.7 billion humans who do not have access to currencies and are excluded from economic development. There are also repercussions to the health of these populations based on their access to the flow of money across the globe.
Imagine not having access to a bank account, credit cards, insurance, payment methods, or purchase methods. You can’t. Our modern identities are tied to our systems of finance. And yet this is exactly what this enormous population is excluded from. To not utilize the existing technology to for inclusiveness says that we accept keeping over 1.7 billion people in poverty. And that is a disaster of humankind.
Empowering 1.7 billion people is a digital thing
Financial inclusiveness no longer requires traditional financial services. Legacy systems can be inconvenient for many populations. Cultural bias might prohibit accessing services. But today, these ignored populations can participate in the global financial ecosystem digitally. Digital payments allow people to securely transfer, receive and keep money using the simple and globally ubiquitous mobile phone. Mobile money solutions give bank the unbanked, especially in rural areas without a reliable and accessible banking infrastructure.
What’s the cost of inclusiveness?
Traditional banking services were never particularly cost effective. Digital payment technologies are often more economical. Gone are the physical branches. Gone are the myriad administrative costs. Gone are the exorbitant fees thanks to low or no-cost accounts. And gone are the risks associated with cash transactions due to encryption and secure authentication procedures. Digital payments are traceable and can aid in thwarting criminal activity.
Here are a few of the ways the unbanked can achieve financial inclusiveness:
- Mobile banking: Mobile banking has become the hottest way for unbanked populations to access financial services. And they don’t need to be aligned with a bank.
- Digital wallets: Digital wallets can be used to store and transfer money, pay bills, and make purchases easier, online or in stores.
- Online lending platforms: These platforms use digital technology to assess creditworthiness and provide loans to people who may not have traditional credit histories.
- Blockchain technology: This tech can be used to create secure and transparent financial systems accessible to everyone. It can be used to create digital identities and facilitate secure transactions without the need for traditional banks.
The potential is huge. The inclusive future within reach.
Implementation must consider the cultures the solutions will operate in to ensure these technologies are accessible to everyone. Digital literacy must be addressed, and specialized education and training programs to can be run by governments, financial institutions, and technology suppliers. For the latter two, this must be regarding as an expansion of the marketplace. For the former, just the right way to run your countries and avoid political turmoil.
Like we said, Where there’s a will AND the technology, there’s a way.
Infrastructure will need to be addressed. Governments and private sector must invest in dependable internet connectivity. Consumer protection laws and security measures must be addressed and promoted to establish trust.
This is no time for small government. This is the time for good government. Governance that leads to growth and prosperity, political calm, and a happier populace. Governance that promotes innovation, modernization, and constancy. Financial inclusion holds great promise, but it also holds great allure for the predators. Governance and regulations must address the potential for high fees, hidden charges, lack of transparency, and general exploitive practices.
Healthy competition must be encouraged, and this competition can hamper the efforts of the predators. Governments should actively encourage increased market participation, and collaboration with Fintech providers, who will be the most experienced in implementing the technologies of financial inclusion.
As we strive to bring financial services and increased prosperity to the over 1.7 people on the planet who remain unbanked, we will need vigilance to safeguard them from predatory practices. Promoting and achieving equitable societies should be the dream of every government and the private sector. A peaceful future depends on it.
Digital cross border payments, payments modernization, mobile wallets, lending platforms, and blockchain is the bright and promising future that is in reach. It’s a vision of growth and prosperity, inclusiveness and fairness and opportunity. Like we said… Where there’s a will AND technology…..
Howard Davidson is the CMO at AlmondFinTech
Almond FinTech is a B2B technology company making financial services affordable and accessible to people around the world, regardless of income. Through our multi- blockchain cross-border transfer protocol, we remove financial barriers and deliver transfer and credit scoring tools that empower everyone, everywhere. www.almondfintech.com