Financial inclusion is a necessary step for economic growth. The unbanked population accounts for 1.7 billion people. These individuals don’t have access to any formal financial services. This means they’re unable to borrow, save, or even invest their money. This leaves them ultimately without any financial protection. Exclusion from global economic services denies the unbanked what they need as a core of their economic empowerment. With so many people cut off from this system, it will become more challenging for many developing countries to move forward.
Empowering the youth and especially women, closes the gender divide and serves the underserved in the world. At a basic level of need, this financial inclusion is imperative for many to escape poverty. It provides these individuals with the financial independence they need. It doesn’t stop there as it helps build communities and drive economic growth. It also tacks inequalities seen in the financial world. As a tool that has proved crucial to empowering women, financial independence has given women more decision power in the home. It also offers more financial tools to help a family’s future and likelihood to prosper.
While this has its challenges, one of the essential solutions in helping the unbanked is mobile technology. As the world is increasing how it stays connected, at least two-thirds of all the unbanked people have access to a smartphone. With their internet capabilities, mobile technology has made it easier and increased the possibility of delivering financial services to the unbanked. This is especially helpful in areas where a bank doesn’t have a branch. This mobile technology allows banking agents to reach their remote clients faster with the need to travel.
Mobile technology has allowed the unbanked to gain more access to the financial tools they need. However, the gender divide is all too real. For many developing countries, women, in general, are left behind in this technology, with ten percent of women less likely to own a mobile device than their male counterparts.
What Can be Done?
Extending both mobile phone technology and financial inclusion is essential to any developing country or area. The answer, however, lies within local governments, tech firms, and even financial institutions to make a more sustained effort with this process.
The commitment needs to be made by governments to support the whole framework of financial inclusion. The finance world, especially banking, will need to foster inclusion amongst their underserved areas. Many are using their knowledge to collaborate with these communities to help determine which financial services will benefit lower-income groups and communities.
Online Banking and Mobile Apps
Thanks to mobile technology, online banking is for accessible than ever. It also encourages many to use the traditional services that were often left to a physical branch. This is especially helpful to those households that use alternative services like payday loans or check-cashing services, which much higher fees for their services.
With mobile apps, they could potentially be what’s need to help the unbanked move into the financial inclusion needed. Many apps offer traditional banking services, but others other blockchain and cryptocurrency services as well. In fact, smartphones have changed the way people or approach a financial service. Innovations into opening a mobile account have changed how people approach the financial world.
Tools of Mobile Technology
Having access to this mobile technology is needed for any empowerment to happen. Many unbanked individuals will have a greater chance of having a mobile phone over a desktop computer. This gives them more freedom to explore the financial needs they have as their options have increased.
However, mobile tools and most online banking don’t fully substitute for it. As many who hold accounts still visit local branches or an ATM. This adds more problems for the unbanked who cannot use these traditional online banking methods due to lack of any identification, gender, or location of residence.
Blockchain, Financial Empowerment, and Mobile Technology
Blockchain technology is transforming the digital and financial arena. With no physical locations needed, the unbanked can use mobile technology to take advantage of cryptocurrencies and related technology to empower their lives with more accessible and cost-effective financial services. It has also impacted many lives on the social level as it has proven more inclusive when it comes to the finance industry.
It empowers others by reducing the costs associated with the financial world. It’s a cheaper and faster way to save or spend money. This makes it easier for lower-income demographics to utilize these offerings through their mobile phones or devices. Since many of the unbanked don’t have the ID documents needs for traditional banking methods, blockchain opens a new realm of possibilities with blockchain-based IDs.
Many of the unbanked need a secure way to handle their financial transactions. Blockchain and cryptocurrencies make this process faster and decentralized. This dramatically reduces costs for loans or sending money. However, blockchains can be financially inclusive. They may still need traditional methods to help the process.
With the unbanked becoming an emerging market for traditional banking methods and blockchain, the ability for these to empower the unbanked is quickly gaining attention. As both move toward financial inclusion, they offer many the financial services they need to pursue economic liberation. With mobile penetration over 50% in lower-developed countries, blockchain could not only draw more customers but prove to be the empowerment necessary for the unbanked to stake their claim in the global financial market. Mapping the road to economic empowerment is starting with mobile technology. As fintech moves fast to keep up with the times and the needs of people, mobile technology will help usher in innovation, inclusion, and empowerment for the unbanked seeking financial services. Using mobile technology and blockchain, and online banking will help create and foster a more inclusive world of finance that can become a fast reality for the unbanked.