Discussing what financial inclusion means in 2019, with co-panellists Steve Polsky, Founder & CEO, Juvo and Suresh Chandrasekaran, Head of Global Financial Solutions APAC, First Data, and moderator Axelle Sznajer, Partner, Egon Zehnder
I recently had the fantastic opportunity to participate in a panel discussion at Money 20/20 Asia in Singapore. We discussed what financial inclusion means today and how organisations can better address the needs of Asia’s unbanked. Most importantly, we assessed our region’s progress in financially enabling disadvantaged socio-economic groups. While there have been some improvements in the accessibility of digital financing, we all agreed that much more can be done to make financial services more inclusive.
While many organisations in Asia are developing solutions tailored for disadvantaged socio-economic groups, such tools alone will not solve the problem. What needs to be addressed is a major financial literacy and knowledge gap. Our team recently looked at the financial inclusion levels of a specific socio-economic group in APAC – migrant domestic workers – and found a gap between their contributions towards APAC economies and levels of financial inclusion. The Frost & Sullivan report, commissioned by Experian, found that nearly 50% of migrant domestic workers in APAC do not have a bank account. The key reason cited was a lack of financial knowledge and awareness.
The first step towards achieving financial inclusion is improving levels of financial literacy. Various industry stakeholders must work together to empower communities with financial skills. Addressing this at Experian, we have been collaborating with women’s charity organisations, such as Aidha and Enrich, supporting thousands of female migrant domestic workers in the region with financial literacy or mentorship programmes.
Another roadblock that consumers and financial institutions will face is issues around online trust. As technology evolves, businesses will increasingly rely on digital consumer identities as opposed to traditional ones. Unlike in-person or over the phone transactions, digital interactions lack visual and audible cues that instil trust. Digitally transforming service and product offerings, and with it, critical infrastructure, can create new types of vulnerabilities.
As such, it is crucial for organisations to innovate and implement solutions that help distinguish legitimate customers from fraudsters and ensure that newly onboarded ones are not excluded. For instance, Experian’s Prove-ID is facilitating the secure creation of online identities, so India’s citizens can be included in the country’s massive online biometric database. The solution has helped over seven million marginalised Indian citizens gain access to government and financial services in a secure and trusted environment.
For the financial inclusion needle to move, financial institutions, fintech companies, regulators and governments will need to continue working together, share knowledge and develop more of such industry-wide standards. It is pointless for regulators to roll out new directives if banks are not able to comply; similarly, banks won’t be able to reach out to the unbanked if they’re not equipped with the right tools and data. I’m quite optimistic and believe that cross-industry collaboration will be key to overcoming financial inclusion challenges – not just in APAC but across the globe.
Chief Executive Officer, Asia Pacific