Financial Inclusion helps people in emerging nations improve their lives.
The world population is roughly seven billion. Of these, 4.6 billion are aged twenty or older. They comprise the pool of adults who could be regular customers of a financial services provider—a bank, savings and loan, credit union, or even Wal-Mart. Estimates suggest that of this eligible pool of 4.6 billion adults, over half—2.5 billion—do not use an established and reputable financial services provider. They are financial nomads who either have no access to financial services or use financial services on a casual basis when they need them.
If you look, you can already see movement to the new paradigm. Banking as a platform is the next step in leveling the steep sides of the global financial pyramid.
What will more quickly help BaaP become a force to address the needs ofthe underserved are:
- Regulations that let non-banks offer financial services. Allow responsible non-bank actors to provide financial services. Lower the barriers for customers to enter the banking system. Use graduated due diligence approaches especially for the newly banked. Prevent toxic behavior by existing players. This can be telecom, networks like Visa, traditional banks, and large financial services providers.
- Leaders who embrace change and dedicate themselves to inclusive services. Amex and MasterCard are leading the way, and others should follow.
- Venture capitalists and angel investors who aren’t afraid of services for the bottom of the pyramid and emerging markets. Lots of money is chasing the next Square; why not divert some of that investment to deserving innovators working on financial services for the next billion?
- Revamp the culture of organizations from one of standalone proprietary solutions to one o collaborative approaches. Be attentive to all aspects of the business in doing this.