As per the latest estimates, close to 2 billion adults globally are devoid of any financial services. Most of them have a basic issue of having no access to funds to open and maintain bank accounts. That apart, even a few small and medium sector businesses too tend to have no access to a financial service that would help them take their business to newer levels. However, digital platforms of late have been capable of offering financial inclusion for these sectors. How can this be achieved? Let us have a discussion on how we can make use of digital platforms for an efficient financial inclusion.
What is financial inclusion?
Financial inclusion is the option used or a mechanism placed in the system to offer the basic financial services to those individuals and businesses that have remained away from this kind of services so far. The mechanism envisages providing basic financial services like savings accounts, payments, credit, and insurance services to these sectors.
The mechanism is developed in such a manner that these services tend to be affordable to these individuals and businesses. Meanwhile, it is designed in such a manner that the policies and procedures tend to be sustainable for the service providers as well.
What are the challenges to financial Inclusion?
Now that there are around 2 billion individuals and approximately 200 million businesses to serve, why are financial institutions reluctant to provide services? Well, there are a few challenges that may cause issues.
One of the major challenges is financial illiteracy. This lack of knowledge can lead to not opting for the services that are affordable enough for them. In addition, this can also lead to victimization due to frauds and malpractices. In fact, have been attempting to address these concerns through awareness programmes.
Next issue faced by most of these institutions pertains to the valid documents. The developing countries specify a vast number of identification documents. This leads to confusion and higher onboarding costs. Having a single identification document can solve this issue to a greater extent.
The relevancy of the products and services can help you reach out the right kind of end users. In fact, opening a transaction account should be used for a wide range of other services like deposits, loans, and insurance. Even then, most of the services offered tend to be cash based. This can also bring up issues in opting for the right kind of financial inclusion.
Digital Platforms are the saviors for Financial Inclusion
Well, digital platforms can help you make improvements in terms of a better financial inclusion. Services like Bankingly have been instrumental in that direction. It is ideally one of the excellent digital platforms that aids the financial institutions to bring their products to the customers through the web and mobile banking channels.
These factors go a long way in making financial inclusion a reality. It helps improve the profitability and sales figures for the banking institutions, while at the same time providing the best options for the customers ensuring their satisfaction. Service like Bankingly is quite effective as it charges the customers only for the actual usage and at the same time takes the burden of operating the revolving the products on itself.
One of the biggest requirements for financial inclusion in the days ahead is the new trends being witnessed among the customer requirements. The power of the internet has been able to make the consumers more informed, and thus expect new levels of service functions including an exceptional customer care. This would only be possible with the improved forms of the digital platforms.
The Parting Thoughts
Well, after studying all those factors, you would definitely understand the essence of the role being played by technology in financial inclusion. The digital platform can go a long way in reducing the cost of financial transactions and streamline the services for a better affordability. The lower maintenance charges would definitely go a long way in promoting the financial institutions in providing products and services at a lower cost. In fact, the costs involved through the digital platforms tend to be much affordable when compared to the conventional channels of banking that have higher operating costs.
Service providers like Bankingly go a long way in promoting the financial inclusion thereby benefitting both finance institutes and the sector that has remained outside the financial inclusion.