The Economics of Financial Inclusion
Description
The Economics of Financial Inclusion
Summary
This report explores financial inclusion and the opportunity it represents for financial services providers. It considers financial inclusion against the backdrop of attitudes toward ESG. It breaks down the four different types of providers focusing on financial inclusion, as well as examining how some of these providers have fared since launch. The report also outlines the best approaches to follow for companies aiming to seize the financial inclusion opportunity, while considering the financial needs and goals of various different demographics.
The term financial inclusion covers a wide variety of different provider types and business models. For simplicity, we organize our analysis around the core types of customers that are typically excluded or underserved. This includes the 1.4 billion unbanked or underbanked worldwide, as well as groups that experience some degree of discrimination from mainstream providers and communities that can access financial services-but not in ways that advance the issues they most care about.
Scope
Summary
This report explores financial inclusion and the opportunity it represents for financial services providers. It considers financial inclusion against the backdrop of attitudes toward ESG. It breaks down the four different types of providers focusing on financial inclusion, as well as examining how some of these providers have fared since launch. The report also outlines the best approaches to follow for companies aiming to seize the financial inclusion opportunity, while considering the financial needs and goals of various different demographics.
The term financial inclusion covers a wide variety of different provider types and business models. For simplicity, we organize our analysis around the core types of customers that are typically excluded or underserved. This includes the 1.4 billion unbanked or underbanked worldwide, as well as groups that experience some degree of discrimination from mainstream providers and communities that can access financial services-but not in ways that advance the issues they most care about.
Scope
- Consumers in the Middle East and Africa are most willing to pay for premium features (85.4% of respondents), underlining the highly favorable market conditions for infrastructure-lite inclusion plays in this market.
- GlobalData’s 2024 Financial Services Consumer Survey found that individuals on the lowest incomes are unsurprisingly most likely to have fallen behind on bills and payments within the last six months, especially in the Americas.
- When we examine financial goals split by gender, our survey data suggests little to separate males and females-with rarely more than 1 percentage point difference across goals such as “budget better,” “pay off debts,” and “build savings and investments.”
- Learn about the key economically viable categories of financial inclusion.
- Understand the best attack vectors for attracting and retaining these segments.
- Identify areas where service or product provision can be common across segments, and where there is the most compelling case for market- or segment-level calibration.
Table of Contents
40 Pages
- Banking and payment executives are increasingly cynical about ESG initiatives
- ESG is not an important driver of provider choice-even among Gen Z
- Financial inclusion is a clear business opportunity with huge social benefit
- Financial inclusion is about more than access
- There are four main categories of financial inclusion
- Mobile wallets are popular across the financial spectrum
- Personal loan growth in developing markets outpaces developed markets
- The Middle East and Africa and Asia-Pacific are very open to non-traditional providers
- The Middle East and Africa and Asia-Pacific are most willing to pay for premium features
- Strong and simple digital features endear consumers to their bank
- Financial inclusion-focused digital banks are acquiring main bank relationships
- Branch access and service remain critical for securing new SME relationships
- New entrants increasingly map resources to existential challenges facing SMEs
- Most entrepreneurs do not use dedicated business accounts
- Inequality in the Americas has risen due to recent economic challenges
- Low-income consumers most value quick and easy problem resolution
- Consumers' main financial goals are remarkably similar across affluence brackets
- Consumers feel differently about how their banks are helping them achieve goals
- A new breed of segmented propositions are targeting marginalized groups
- Consumer preferences by gender are extremely similar across all goals
- Financial goals are similar among immigrants and natives
- Immigrants hold traditional banking establishments in lower regard than natives
- Quick problem resolution is especially important for immigrants
- Remittances from major economies to developing nations is a burgeoning market
- Top 10 outward remittance markets
- A new breed of segmented propositions are targeting conscious communities
- ESG is most impactful as a driver of dissatisfaction among Gen Z customers
- Key Takeaways
- Appendix
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