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Financial inclusion widens

Financial inclusion widens

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​​​​WSBI members reach new UFA2020 levels



>> WSBI and UFA2020 goal

>> Position on finanical inclusion 

>> Related: Scale2Save





BRUSSELS, 18 May 2020 – WSBI announced today that its members' financial inclusion efforts reached in 2019 an all-time high by number of transaction accounts and people served. 

The association's more than 100 members in some 80 countries now serve 1.773 billion customers, 421 million more customers since signing on in 2015 to the World Bank Group Universal Financial Access 2020 pledge. Collected through 31 December 2019, the data also show 556 million more transaction accounts since committing, as a Coalition Partner supporting the UFA 2020 goal, to reach 1.7 billion customers and add 400 million new transaction accounts in 2020. Collected through 31 December 2019, the data show that WSBI members went well beyond the commitments, which already had been reached by year-end 2018.

WSBI Managing Director said: “Since reaching UFA2020 goals in 2018, members have pressed on. They further further widened financial inclusion, especially towards swaths of people previously excluded from the banking system. People improve their lives through access to financial services."

WSBI and financial inclusion: An account for everyone

Always a core aspect of WSBI strategy, financial inclusion commitments became part of the association's public outreach during the past decade. This pledge reinforced WSBI's continued engagement with its 'Account for Everyone' goal launched by the trade body in 2012, which was re-endorsed in 2015 at the World Bank spring meetings. The UFA commitment also forms an integral part of the Washington Declaration issued during the 2015 WSBI World Congress.

Lessons learned, success factors, obstacles

Achieving ambitious UFA goals by 2020 required collective effort that addressed several obstacles. Members tapped into innovation, navigated a fluid regulatory landscape all while finding new ways to model their business to better deploy assets and re-align cost structures. They employed a customer-centric approach to banking offers, which entails detecting changing cultural trends and attitudes while investing in new ways to raise customer service levels and improve people's experience with their locally focused savings bank or retail bank.

As work continues to bring more people out of the financial wilderness, banks struggle to deliver their message to certain low-income groups on how to use widely available products. Those product offerings require careful design to serve the needs of people with oftentimes patchy income streams.

Well-crafted pricing structures and easy-to-grasp terms keep in mind charges and other costs that might repel people from using an account. Relatedly, backend IT and processes need to avoid upward cost pressures, which can compound overhead costs and service offer. Delivery of service depends greatly on staff training to better deliver an effective low-cost service.

De Noose added: “Customer centricity and digitalisation both played a crucial role to achieve the goals. Banks constantly seek ways to help people, especially in remote and rural areas, to gain access to banking services."

Challenges: Aging populations, digitisation, societal shifts

Banks face many challenges when it comes to financial inclusion. Some examples include finding new ways to serve aging populations in many regions as well as migration flight by young people to cities. Banks want accounts to be opened and used so they try to keep all accounts active by strengthening digital payments. Digital access remains a challenge too.  WSBI members see a need for digital financial education placed on the agenda and remind people that building up savings remains a useful way to weather the storms that life brings. 

Related to societal shifts, banks tackle account dormancy and uneven geographical coverage. By taking a customer-centric tack, banks apply traditional and alternative outlets such as agent banking, which work in tandem with banks so that people can have usable, accessible, affordable, and secure banking services.

The retail banking sector can help reinforce the link between people and communities. Since their inception, savings banks' have had as part of their mission to provide a return to society. They do this by offering a wide range of products accessible to a maximum of people – a highly efficient form of financial inclusion – and also by giving back an often-substantial part of their profits to their communities – directly or via foundations. Retail banks, big or small, with various legal structures, work with people from all parts of society, who before then had simply no access to banks. Savings and retail banks focus on profitability as a basic requirement for a sustainable, long-term action but have an objective that goes beyond return on equity.

Beyond 2020: Digital 'New Normal'

As the digital 'New Normal' sweeps over retail banking, WSBI members see new opportunities to use innovation to connect better with people who seek basic financial services, especially early on during the banking journey. WSBI members assess and manage risks posed by technological progress too, such as beefed up cybersecurity, more efficient payments and better join up between bank branches, online and mobile channels. Their work is especially important as Covid-19 ravages economies and puts strain on households, SMEs and society as a whole.

De Noose added: “WSBI members also serve marginal neighbourhoods in urban areas, from younger people to those who, due to their advanced age, lack access to basic banking services. When financial inclusion improves, more individuals are empowered, more jobs are created, and the economy grows."

 

 

 

Financial inclusion: Real-world examples

>> Learn more: Agent banking services in Bangladesh

>> Scale2Save: 'Bank in a bag' in Kenya

>> Learn more: WSBI financial inclusion page

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Financial inclusion; Digitalisation; Innovation Hub; Innovation