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3 Ways to advance usage and drive impact in financial inclusion

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Unprecedented technological advancements and corresponding innovations in business models have helped financial inclusion evolve beyond merely connecting people to a bank account. It is, for instance, helping level the playing field for small farmers by providing access to buyers, more efficient pricing, and speedier payments. It is replacing unwieldy paper voucher systems used amid humanitarian crises with prepaid cards for food and supplies. And it is helping small and micro-merchants expand their businesses by leveraging purchase data to enable credit scoring.

As the Digital Revolution continues to progress, digital financial services are making financial access ever more feasible. In high-income economies, the proportion of people with financial access has reached 94 percent. In low- or middle-income countries, financial access is a reality for a respectable 63 percent. Since 2011, more than 1.2 billion adults worldwide have gained access to a bank account, including 515 million since 2014.1

Mobile networks are widespread as well, accessible to nearly 90 percent of the population in developing countries today.2  Mobile money accounts, in particular, are prevalent in a number of markets: in Kenya, 73 percent of adults have one, while in Uganda and Zimbabwe, about 50 percent do.3 Similarly, more than a billion users have mobile accounts in China.4

Usage: The Next Frontier in Financial Inclusion

The progress in financial access has been remarkable. But robust and active usage of digital financial services, remains a challenge. Indeed, about one in five bank accounts is currently inactive, without a deposit or withdrawal within the past year.5 Additionally, about two-thirds of the world’s mobile money accounts are dormant.6  Without engaged usage, digital financial services will not achieve the commercial viability necessary to achieve scale nor enable financial health and resilience. A number of emerging markets such as China, India, Kenya, Mongolia, and Thailand have achieved account access of more than 80 percent, yet account usage remains very low.7 Overall, developing economies have been slow to close the usage gap with high-income economies (Figure 1).

Figure 1. Usage of Accounts, 2014 vs. 2017

Figure 1. Usage of Accounts, 2014 vs. 2017

Fulfilling the promise of financial inclusion for boosting prosperity (a $3.7 trillion boost in GDP in developing economies by 2025)8 and for improving financial resilience and financial health requires engaged usage of digital financial services. After all, access is inconsequential if people do not use the services available to them.

The next frontier in financial inclusion must then be to move beyond access to active, consistent, and informed usage of financial products and services globally. This demands the development of compelling products that deliver clear benefits to consumers, consumer education and the development of robust ecosystems.

Driving Meaningful Usage in Digital Financial Services

According to our latest research, The Next Frontier in Financial Inclusion: Moving Beyond Access to Usage, based on lessons from programs that have connected more than 348 million financially excluded consumers to the formal financial system, three key components are needed to move the newly included from access to usage:

  1. Focus human-centered design on customer needs and cultural considerations. Our market research in 16 focus markets across five regions shows, for example, that urban residents are more commercially engaged, are more familiar with the use of payment products and trust these products.
  2. Rural residents, in contrast, rely more on cash and are more risk-averse. Two-thirds, for example, feared losing control of their money or savings if they did not have physical control of them. These insights can help product design teams tailor financial instruments for different user groups.
  3. Build financial knowledge and change behavior. Knowledge and trust are significant hurdles in any financial transaction. Access to mobile phones is nearly universal in the Middle East and Africa, for example, yet the robust use of mobile financial services is still rare, mainly because of a lack of knowledge and trust.
  4. To overcome this, Mastercard partnered with a mobile messaging service devoted to building mutually beneficial relationships between financial service providers and their customers, and one of the region’s leading telecommunications providers, to create a text messaging option to open a dialogue with users and answer key questions about finances and financial pain points. Increased knowledge and trust led to an increase in monthly transactions.9
  5. Build robust ecosystems to enable scale. New models for deploying technology, along with new payment flows and channels, are crucial to expansion. As an illustration, a partnership in Pakistan between the national bank, two of the country’s leading telecommunications players, and Mastercard helped to expand digital payments. In the spirit of cooperation, the partners recognized the value in allowing consumers to pay at any accepting merchant, regardless of provider.
    This payment interoperability was critical to boosting the overall level of acceptance. By addressing consumer and merchant needs collaboratively, the service providers were able to reach a far larger population more quickly and efficiently.

The journey to financial health

Partnerships such as those in Pakistan and with service providers will be imperative to the continued expansion of financial inclusion. In helping populations connect to networks that help them save, expand their businesses, and become financially secure, governments and corporate partners are performing a valuable service not only for individuals, but also for local economies.

In this regard, opportunities exist for actors interested in spreading digitization and enabling usage, even beyond the financial industry, to partner and help drive the growth of payments. Stakeholders across different industries, especially those serving the base of the pyramid — from agriculture to telecommunications to consumer goods — all have important roles to play in extending digital payments to the underserved. These non-traditional stakeholders, who may not have previously recognized payments as an opportunity to expand into new markets, to rethink business models or to reduce costs, have considerable incentive to adopt digital payments.

By engaging with a broad and diverse group of strategic partners, we can make significant progress in helping hundreds of millions of people attain financial health and promote inclusive growth.


1 Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. 2018. The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Washington, DC: World Bank

2 Montgomery, Harold. “An account of the unbanked: From mobile payments to more financial inclusion.” BAI (Blog), May 2017.

3 Demirgüç-Kunt, Asli, Leora Klapper, Dorothe Singer, Saniya Ansar, and Jake Hess. 2018. The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. Washington, DC: World Bank

4 Jacobs, Harrison, One photo shows that China is already in a cashless future, May 29 2018, Business Insider.

5 Demirguc-Kunt, Asli and Leora Klapper. Measuring Financial Inclusion and the FinTech Revolution: The Global Findex Database, Washington, D.C.: World Bank, 2017. Page 8.

6 Grameen Foundation, Digital Products and Services.

7 “Gains in Financial Inclusion, Gains for a Sustainable World.” World Bank. May 18, 2018. gains-in-financial-inclusion-gains-for-a-sustainable-world.

8 Manyika, James. Lund, Susan, Singer, Marc, White, O., and Berry, Chris, Digital finance for all: Powering inclusive growth in emerging economies, McKinsey and Co., September 2016.

9 Mastercard Analysis.

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