Greater cooperation among banks, policy makers, NGOs and technology providers is vital in improving access to financial services and fostering prosperity in the post-financial crisis world, according to a report, 'Banking for Billions,' launched by Barclays and the Economist Intelligence Unit.
‘Banking for Billions’ is the second publication in the Barclays Social Intelligence series which tackles global social and environmental issues and the role of the financial services sector in delivering solutions.
The report examined the current global landscape of financial inclusion, studied recent trends, the impact of the economic downturn and the potential role of new technologies and delivery models.
‘Banking for Billions’ found that despite considerable progress, a large part of the global population still lacks access to financial services. 2.5 billion of the world’s adults remain unbanked and do not use formal or semi-formal financial services.
New technologies, such as mobile banking, combined with new business models, can deliver a step change in effectively servicing low income customers. A billion people with mobile phones do not currently have a bank account, representing an attractive opportunity for delivering banking services on a mobile platform.
Access to capital, particularly from international investors, has become more difficult for microfinance institutions, who are now looking for ways to mobilize deposits.
Institutional, policy and regulatory frameworks need to evolve to provide a robust platform for further innovation, as per the report.
‘Banking for Billions’ concluded that although there is a strong groundswell behind efforts to improve financial inclusion, there are also numerous barriers preventing further progress, including a lack of education, outdated regulation and policy, and a cultural mistrust of formal financial providers.
Deanna Oppenheimer, CEO of Barclays UK retail bank, said: “Access to financial services lifts people from poverty and fosters economic growth, but what this research shows is that there is still a long way to go with efforts to extend financial inclusion. The solutions lie in innovative financial products, new technology, change to outdated policy and increase financial literacy. But none of these can solve the problem in isolation.
“The report also shows there is a growing consensus among experts that the most critical issue now is how to extend financial inclusion to more of the world’s population, and that the only way of ensuring progress is for financial institutions to work with NGOs and policymakers to create innovative solutions and a sustainable policy platform.”