The Final Leap Towards Financial Inclusion

Published: Aug 1, 2022  |  

Technology executive  building and scaling organizations in Enterprise B2B and SaaS

Nowadays, it seems like the world is rapidly changing on a daily basis. As a global population, we’re experiencing unprecedented challenges, which must be addressed. Fortunately, there is a silver lining; moments of intense strife often precede periods of great change. As such, there’s never been a better time than now to assess areas of everyday life that need improvement. In my opinion, one such area is the challenge posed by financial exclusion.

In short, financial exclusion represents a significant global problem, which continues to prohibit individuals and economies from achieving levels of maximum growth. In recent times, major institutions, like the World Bank, as well as industry titans such as Deloitte, have recognized an urgent need to implement new measures that address the challenge. So, how do we go about solving the problem?

What Is Financial Exclusion?

To begin with, let’s address exactly what we mean by financial inclusion. The term is admittedly broad, but widely refers to how easily individuals and businesses can access affordable financial products and services that meet their needs. Unfortunately, a significant number of people around the world currently find themselves on the wrong side of this challenge. In turn, the problem is affecting growth and heightening levels of poverty.

Research highlights the alarming levels of financial exclusion that exist around the world. In fact, the most recent global study of financial exclusion found that close to one-third of adults – 1.7 billion – are still unbanked. It’s these unbanked individuals that are invariably financially excluded, and with such high figures exposing the truth around the situation, it is indeed a cause of great concern. Unfortunately, the issue also disproportionately affects vulnerable groups, with over half of unbanked people made up of women. Similarly, around 75% of the world’s poorest people are currently unbanked.

The Challenge Behind the Issue

It’s evident that financial exclusion is a considerable issue, which begs the question; can we really fix it? In truth, there is no “silver bullet” to solving financial exclusion. Addressing the challenge will require joined-up thinking across multiple industries. However, there may be certain sectors with bigger roles to play than others. In particular, the banking and credit lending sectors must look to change, as they are currently playing an outsized role in exacerbating the problem.

It is important, though, to note that this has not been intentional. In fact, financial exclusion is an issue that ultimately undercuts the banking and credit lending sectors. To this end, as the problem worsens, the pool of potential customers for these sectors dwindles. Ultimately, as more people become excluded from accessing financial services, banking businesses and credit lenders will also feel the pinch, which propels an incentive to change.

How Do We Fix It?

Now that we’ve covered the negative parts of the issue, know that it’s not all doom and gloom when it comes to financial exclusion. Thankfully, new solutions powered by innovative technologies are finally coming to market, which have the potential to revolutionize how we approach the issue. Additionally, there’s now clear buy-in across different industries about the urgent need to implement such solutions. Therefore, there is hope that the future world may still become financially inclusive.

Notably, data-driven solutions, which allow banking institutions and credit lenders to create more responsive credit assessment models, could indeed play an instrumental role in this drive. Rather than being optimized for the established, included, and conventional borrower, these new systems enable banking companies and credit lenders to build models, which can better identify more relevant tenets of business success.

With such systems in place, these sectors can begin to address the challenge of financial inclusion before it worsens further. Offering a considerable upgrade on what’s come before, these solutions can leverage billions of data points to identify and merit success factors as they are most clearly expressed across different market sectors. It’s a long overdue change, which now needs further adoption from businesses across the world of finance.

Building A More Inclusive Future

Should this change be enacted, the finance sector can begin to do its bit to address the challenge of financial inclusion worldwide. What’s more, this adaptation will help financial services companies to serve a greater number of individuals and businesses, which in turn, will lead to an upturn in revenue and profitability levels for these companies. To this end, it’s a win-win for all involved, and more necessary now than ever before. To make bold progress forward, it’s time for the sector to take that final leap and implement new measures that make even greater inroads with regard to fixing the problem. As CEO and Founder of Uplinq Financial Technologies, I’ve been proud of the leading role our company is playing in working towards a more inclusive global financial future.

Uplinq is leading the fight to place new, modern credit assessment methods into the hands of financial institutions. With solutions like ours, we can help providers to leverage billions of alternative data points to generate scientifically-validated and accurate lending decisions. In doing so, such systems are helping to better serve those currently excluded from traditional financial services and thus improving levels of financial inclusion. (Those interested in learning more about Uplinq can visit our site here.)

Happily, we might already be seeing a more inclusive future coming to fruition. In recent years, great strides have been made toward financial inclusion. Between 2011 and 2017, a total of 1.2 billion adults gained access to a bank account, which is an important first step in addressing the wider challenge. To make this change stick and create systemic change, it’s vital for more industry leaders to take up the cause and commit themselves to financial inclusivity, which will ultimately create a more equitable and prosperous for us all.

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