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Bringing Banking to the People – Financial Inclusion

According to a research, almost around 2.5 billion adults live in Asia, Africa, Middle East, and Latin America. Now, more financial services are willing to maximize access to this part of the population and they are doing it by rolling out the mobile solutions. Several ATMs and bank branches are in urban areas and not reaching unbanked people in rural areas. Thus, it creates an important barrier, as access to financial products requires KYC processes to occur.

Agency network helps in providing local access to banking services, and then the providers can create an opportunity to maximize their market share, particularly in that area where unbanked people tends to live. Along with, it provides cost reduction by minimizing the cost of handling low-value transactions and eliminate the need to establish a physical presence. Subscribing financial services requires potential customers for presenting documentation to prove their financial history and identity. Various smartphones or tablets perform biometric authentication as they are equipped with cameras, and thus they provide an alternative to the KYC process.

To expand the footprint, several microfinance institutions or banks started using agent banking. Bringing banking to the customer can make them enjoy safer access to financial products. The services of agent banking are rewarded with commissions and these offerings can help to grow their own business.

The benefits of agency banking should not only be considered in emerging markets. Few banks in developed regions are suffering to onboard clients who opt only for mobile. Enrolment still needs potential clients to visit a branch, and thus, the banks which offer a mobile brand generally miss out on acquiring new clients. It does not stop at the tech-savvy people who wish to use fully digitized banking services. It is recommended to promote financial inclusion in emerging markets or to create convenient access to banking services in markets.

Financial inclusion provides access to enable the most vulnerable in society to come out of poverty and it minimizes the inequality in society. It not only helps individuals or families but helps drive economic growth. It enables people to manage and save their money, and empower the people with the skills to make the right financial decisions. It provides the ability to grow a business, which gives an opportunity to people through microfinancing schemes, or the ability to handle uncertainties that require financial shocks or unexpected payments.

Financial inclusion through payment system and savings enables potential and empowers men, women and every community. This, in turn, leads to the promotion of investment within the community, and research shows that employment boosts status, and income. Enabling financial inclusion means mobile money. In emerging markets, most of the people have a mobile device, and thus mobile money quickly enables people to bring into the main economy and gives them the opportunity to make payments in an affordable and secure manner. Therefore, there is a much focus on mobile payments. Developing mobile payments solutions in the industry will ensure that financial inclusion remains in the spotlight.

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