Digital innovation and technology are spreading quickly through the whole world in an increasing rhythm. We can see the same behavior occurring nowadays within financial services, where the latest innovation and disruptive technologies are shifting paradigms and creating potential revolutionary changes in the way we use and are served by financial services.
But one closer look into the similarities between these two areas will bring to our attention one big problem: disparity. The inequality in digital inclusion is still one of the biggest challenges we should try to solve in a global scale. And this scenario is even worse for financial inclusion, because these services are better served via digital channels.
It is very hard to isolate financial inclusion from digital inclusion, specially when a wide range os services are served by new ventures and startups (like FinTechs) that rely on internet connection and mobile apps to serve and contact their customers.
Though this might lead us to think that digital inclusion is more important than financial inclusion, not only because it is key to the distribution and reach of financial services for a great number of people, specially within developing economies, but it also allows access to culture, education, communication and mobilization when disasters occurs, we should not forget that financial inclusion also provides savings, payments, credit, and insurance, that help people better manage their lives, smooth their cash flows, overcome income shocks, and invest in their skills, health, or new businesses.
While digital finance is one of the fastest-moving, most disruptive industries globally, which is reinventing traditional business models of the financial sector, there are still some relevant improvements to assure its further development, like offering financial services directly to customers, use alternative information to identify them and use digital data to design human-centered products, and opening platforms and Application Programming Interfaces (APIs) to facilitate access to product and services.
Outdated or inappropriate regulatory requirements often create barriers to financial inclusion, data ownership was another regulatory issue that was discussed with potentially large implications for development impacts and the expansion of digital finance and the participation of specialized new players also creates new risks that need to be identified, managed, and mitigated.
While not an end-in-itself, the transaction account often is a key stepping stone to broader financial inclusion. But as we need to look beyond internet access to achieve digital connectivity for all, so we must look beyond account access to achieve universal financial access.
Our hope is that the urgency caused by the fast expansion of the digital finance sector hasten the changes necessary for a global inclusion movement both digital and financial.
Nobiletec is a multi-national consultancy firm specializes in B2B, B2C and P2P FinTech solutions.