The Economist newspaper publishes letter from WSBI expert on member banks' financial inclusion efforts.
>> See letter in 16 June edition of The Economist
>> Learn more about financial inclusion efforts at WSBI
BRUSSELS, 15 June 2018
The following Letter to the Editor of the The Economist newspaper from WSBI Director Ian Radcliffe reacts to the financial inclusion special report called “Exclusive Access" that appeared in its 5 May edition. The letter ran in the 16 June edition.
Your special report on financial inclusion (May 5th) gave a clear picture of progress made in providing financial services to the unbanked. Savings, postal and retail banks who are members of global association WSBI are well on their way to adding 400 million new accounts by 2020, from a 2014 baseline. People in remote areas, like those in cities, crave basic banking services, namely transaction accounts. The 1.7 billion people who remain unbanked will be hardest to reach. Innovation and digitisation will help address this.
But enhancing savings opportunities is a big challenge. Storing money, either through traditional banks or channelling village savings groups into banks, is the next step after using a basic transaction account. Research shows poorer communities, like richer ones, prefer to save than borrow. That’s rational.
If Africa and other regions are to make greater strides they need better financial frameworks and rules. Consumer protection should come first. Rules already on the books need a careful rethink, too. West Africa, for example, sorely needs easier agent banking rules to unleash financial services. Another area is Application Programming Interfaces (APIs) and open banking, where common standards in emerging markets would help protecting those who are vulnerable and less digitally savvy.
Director, World Savings and Retail Banking Institute