Blog: Financial Inclusion is Community Wide

Almost every individual, every organisation and every industry has become increasingly mindful of sustainability and environmental and social governance in recent years. Alongside this, significant changes in our economic and political landscapes have led to a particular focus on the topic of financial inclusion. Although the specific outlook and nuances of financial inclusion vary across our global geography, it impacts almost every person – whether directly or indirectly. 

When considered on a global scale, reports show that financial exclusion affects more than 13 million people, or 4% of the adult populationⁱ. Drill that down to a European focus and the numbers vary significantly. For example, almost every adult has a bank account in Sweden, with the unbanked number sitting at 0.3%, compared to an unbanked population of almost 30.9% in Romaniaⁱⁱ.

With this in mind, what action can the industry take to ensure this gap in services begins to close and that every person has both accessible and affordable banking solutions available to them? Let’s consider some principal areas of focus, which can help to drive a tangible difference. 

The services customers want and need
Developing the right services for the right people is critical in the move towards better financial inclusion. Those frequently most impacted are the younger and older generations, as well as those with disabilities, which has been highlighted in different ways in certain countries. Despite the number of unbanked people being very low in Sweden as referenced, there has been a big shift towards digital payments. This has left some people who rely on cash as a payment method, and in particular older generations, with more limited payment options and increased struggles with day-to-day life.  

Inclusive development and personalisation also play key roles in getting future services and solutions right. By tailoring services more closely to the specific needs of end-users, there will naturally be a better connection and prevention of potential financial exclusion. 

Data can help underpin this re-assessment and re-mapping of services, but the challenge oftens comes when considering how to use data. Financial institutions naturally hold a lot of information about consumers, but often do not have the experience or resources to turn this into meaningful insights. To move forward, data must be considered a strategic asset and used as the foundation for more personalised services and an enrichment of solutions. Not only will this aid greater inclusion, but it will also foster customer satisfaction and loyalty for the financial institution.

The empowerment of education and trust
Literacy and financial literacy are fundamental building blocks on the road to financial inclusion. Giving people the right information and right tools can help them make better money-related decisions and build financial resiliency for the future. Working from the ground up in this way can also help drive economic growth. If those within the community can thrive, this supports the community overall. Moreover, with 99% of businesses in Europe being SMBs, business-focused financial education is just as important as consumer education. 

Providing value-added banking in this way can also go a long way in rekindling trust and enhancing customer relationships. Going above and beyond the transactions of day-to-day banking and empowering end-users will build deeper relationships, as well as potentially attracting new customers. With many of us now wanting to bank with a responsible organisation, financial education is the right thing to do – both for the individual, and for the financial institution. 

Working towards one goal 
As with many things, working together makes a big difference. Pockets of success are certainly visible, but for us to truly take a leap ahead with financial inclusion, it requires everyone to be involved. Whether that is the financial institutions themselves, service providers, governments, retailers or industry bodies, we need to all push in the same direction. 

The path towards financial inclusion requires an ongoing roadmap of commitments and focuses and will be a continuing journey over the coming years. Innovation and service progression is the norm for most industries, but what is crucially important is that individuals, businesses and the wider community are all part of this change. The opportunity to make a difference is there – and we all must take it.

Originally published in Global Banking and Finance Review.

ⁱWSBI-ESBG analysis, 2022
ⁱⁱWSBI-ESBG analysis, 2022