Many individuals and businesses in countries around the world are yet to access affordable financial services due to low literacy level, regional limitations such as lack of basic amenities, unavailable credit records and so on.
The Innovation in financial inclusion report by EY stated that 1.6b of the world’s population are still unbanked and more than 200 million micro, small and medium scale enterprises operate without access to financial services. The study found that:-
- more than 40% of micro small and medium scale enterprises in underdeveloped economies are unable to access financial services.
- 30% exist in middle income countries and 15% in high-income regions.
- In addition, 75% of financially unbanked individuals live in 25 countries.
Financial Services Companies have the Potential to generate US$200b in additional annual revenue in 60 emerging markets. What requirements are needed to accelerate financial inclusion and generate revenue? Considerations include:
- Provide structured product offerings: Your financial institution would need to provide flexible product offerings. For instance, offering basic accounts since standardized accounts might not be suitable in some regions. Also, your bank can innovate on financial products that meet the needs of people living in the region. These will result in positive engagement and better customer acquisition.
- Transform digital channel offerings: Your enterprise can adopt an effective strategy that involves providing affordable financial services to customers at their door steps leading to faster acquisition and profitable financial inclusion. Additionally, your bank would need to adopt suitable innovative technologies such as mobile e-payment systems, Digital Identity (ID) systems, data infrastructure, field collection systems and so on. jCollect is an efficient field collection solution for your enterprise.
- Innovate on risk mitigation: Unbanked individuals and micro, small scale & medium enterprises may not have financial records and other details required for loan approvals and are unable to access credit facilities from your enterprise. However, your bank can explore innovative credit profiling, underwriter procedures that assess customer data from multiple platforms such as: social media usage, biometric digital trails, IQ test, and digital footprints on e-commerce activities of potential customers as sources of data for credit risk assessment. Your company might need to partner or imitate modern underwriters to obtain prospective unbanked customer records that can be used as credit history.
- Leverage on Customer referrals: Your enterprise would need to provide efficient customer experience and engagement by responding positively to feedbacks along customers journey; resulting in satisfaction and loyalty. Also, happy customers will accept and respond positively to your bank’s referral request; They are satisfied with your services delivery, they will be happy to refer others.
- Leverage on field agents & agency networks: Your enterprise can employ competent field agents to provide financial services at remote locations. In addition, your bank can accelerate profitable financial inclusion by obtaining appropriate banking agency approval and engaging qualified agency networks to deliver financial services at suitable locations. For instance, financial inclusion is being accelerated in Bangladesh with the deployment of over 750,00 mobile money agents and over 3200 agent banking outfits. jReamPay is an efficient Agency Banking Solution for your bank.