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> Posted by Center Staff
The recently released Global Findex, revealing that the world’s unbanked population has dropped to 2 billion, gives us much to celebrate. But, as Sonja Kelly pointed out earlier this week, account ownership is just one dimension of financial inclusion. If the world’s unbanked are to realize the full benefits of financial services, it’s critical that an uptick in accounts is paired with quality services that meet clients’ needs. To meet the goal of financial inclusion by 2020 (FI2020), leveraging innovations in technology is essential.
In this podcast, CFI’s Susy Cheston is joined by Dr. Bejoy Das Gupta, Chief-Economist for the Asia-Pacific region at the Institute of International Finance, Ed Brandt, Executive Vice President for Government Services and Solutions at MasterCard Worldwide, and Paul Tregidgo, Managing Director at Credit Suisse. Together, they explore the importance of technology and innovative partnerships in making the vision of Financial Inclusion 2020 a reality, sharing key takeaways from a roundtable hosted jointly by CFI and the Institute of International Finance.
For more on technology and financial inclusion, read the FI2020 Roadmap to Inclusion on Technology-Enabled Business Models. And stay tuned to this blog for more on Monday’s roundtable event.
> Posted by Sonja Kelly, Fellow, CFI
In 2013, Elisabeth Rhyne was asked what she was particularly excited about as she looked forward to the future of financial inclusion. Her response? “A second data point.”
Well, now we have that second data point. The 2014 Global Findex reports that 62 percent of people in the world have a bank or mobile money account, up from 51 percent in 2011, and those two points describe a line. Simply projecting that line forward takes the world to about 83 percent of people with accounts by the year 2020. But of course, that’s not the whole story…
The Global Findex encouragingly articulates some concrete steps that governments and providers can take to accelerate progress toward financial access. I would venture to guess that these steps would bridge the gap between the projected 83 percent and the full 100 percent by 2020 (you can read about the World Bank’s goal of universal access by 2020 here).
So let’s just assume that universal access will be a reality by 2020. We can envision a world in the near future where people receive wages, government payments, and remittances into their bank accounts. Businesses spend less on payroll and have fewer risks than if they paid out in cash. Governments avoid corruption associated with social benefit payments by having a cheaper G2P system that entails fewer human intermediaries. Remittances are cheap—or even free—and go directly into the recipient’s bank account. Cause for celebration, right?
Well, yes, but not so fast.
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