Published on Voices

Digital financial inclusion: what works and what’s next


Over one billion women in the world do not have access to financial services. Having access to a transaction account is a first step for financial freedom and for women to take charge of their lives. 

Women are an underutilized resource in development. Not having access prevents women from having an equal footing in society. Financial inclusion can unleash enormous potential for economic development.

The World Bank’s World Development Report on gender estimated income losses due to women being excluded from the world of work at 10%-37% of GDP across all regions. Research by the World Bank Group, the IMF, the OECD, and private sector studies show that billions can be added to global GDP by advancing women's equality. 

Digital technologies are extending access to finance to millions of people, including women. This is incredibly exciting and the world is placing high stakes on digital technologies as a principal way to bring the 2 billion unbanked adults into the formal and regulated financial system.

It’s much easier today to save, make payments, access credit, and obtain insurance, all of which helps people manage day-to-day expenses, make long-term plans and handle unexpected emergencies.

In 2016, the G20 issued a report led by the World Bank Group and the People’s Bank of China – the High Level Principles for Digital Financial Inclusion - which provided eight recommendations for countries to encourage financial inclusion through digital technologies. A few weeks ago, the G20 finance ministers endorsed a follow-up report which profiles what countries have done in line with these recommendations.

Countries are taking different approaches. For example, Brazil, Mexico and Turkey have been digitizing government-to-person payments (salaries, welfare, etc.), while India has invested heavily in building critical digital infrastructure, including creating national digital IDs.

To mitigate the risk of expanded digital access, Ghana, for example, is piloting new ways for insurance providers to include mobile phones.

Likewise, countries are adjusting their legal and regulatory frameworks while ensuring a fair and just level-playing field. They are also increasingly employing tiered-regulation and customer-due-diligence approaches to promote financial inclusion, while conforming to anti-money laundering/combatting-terrorism financing requirements.  China, Mexico and Tanzania are such examples.

The speed and breadth of innovation in digital financial technologies is fascinating. But these new possibilities create new expectations.

Essentially, countries must be nimble and be able to adapt quickly to keep up with this rapid pace of change to leverage technology for the greater good.  

Governments must lead the way. They must create space and give the industry a green light to innovate.  They also need to coordinate across relevant agencies, including social welfare agencies that interact with people not in the formal financial system.

At the same time, regulators need to acquire better digital tools and look for new ways to foster fintech innovation, from pilot programs to greater collaboration with the industry.  Also, big data requires more sophisticated and automated systems that can provide real-time monitoring and analysis of financial activities.

Governments also must promote interoperable open technology systems that work with one another so that everyone can participate in the financial digital technology regardless of what particular phone or service they use.

Most importantly, governments must prioritize the creation of national digital IDs, while addressing legitimate privacy and data security concerns.

The World Bank Group already works with national authorities to help them develop the regulatory framework which addresses opportunities and risks created by fintech  in line with global standard-setting guidelines on payments and financial inclusion.

Developing countries profiled in this report are among the 25 countries where over 70% of the unbanked people live. They have been identified as priority countries in the World Bank Group’s Universal Financial Access 2020 initiative, whose goal is to provide financial access to adults currently left out of the formal financial system. If these countries make great strides toward digital financial inclusion, the world will be so much closer to reaching this goal.


Kristalina Georgieva

Managing Director, International Monetary Fund (IMF)

Join the Conversation

The content of this field is kept private and will not be shown publicly
Remaining characters: 1000