The current wave of technological innovation is shaking the foundations of how individuals and businesses manage their finances. Here are ten facts about the current state of financial inclusion.
Of the 2 billion adults in the world who do not have access to formal/informal financial services, about 1 billion live in Asia. This is a massive group of people for which technological advances have the potential to improve the standard of living. Furthermore, this population represents a vast market of untapped potential for insurance companies, banks, investment firms and many more.
Approximately 62% of the global adult population has access to a bank account, but the majority of this group do not use them for savings, to receive wages, to pay bills, or to borrow from banks. Engagement with banking services can certainly improve.
Reasons for this varies, but the advent of more intuitive and modular technology has the potential to increase engagement with financial services and stimulate this niche in the economy.
Globally, more men have bank accounts than women (65% to 58%). This discrepancy is highest in areas of South Asia, where it reaches 55% male vs only 37% female account ownership. Furthermore, of the global unbanked population of 2 billion, 1.1 billion are women.
Many people who have bank accounts may still lack access to certain services that would make them financially included. These include affordable and accessible savings, payments, remittances, credit, insurance, and investments.
New technologies such as Progressive Web App (PWA) can provide these services with streamlined and easy light weight interfaces. WeChat pioneered the model of “apps within an app” called “Mini programs”.This is an example of how new technologies allow services to be consumed without installing an app on a mobile phone.
Innovations in tech have allowed new digital applications to offer financial services without the need for a bank-account, expensive device, or even deep knowledge about the technology.
SURETY.AI is an example of one such service that aims to improve financial inclusion by offering insurance services that do not require deep knowledge of the technology behind them. We aim to produce intuitive and accessible products to those who need them — see, the unbanked.
Using new technology to bring financial services to more people is a worthy goal, but companies must solve two problems to achieve it:
1. Companies need a means to verify users’ identity (demand-side)
2. Users need a means to access financial services (supply-side)
Addressing these two problems is crucial for bringing financial inclusion to a greater worldwide level.
Thanks to digital technologies, the large population of people (mostly in Asia and Africa) who lacked any formal proof of identity will be able to do so.
For example, India’s Aadhaar system is a pioneer in identity verification. It uses biometrics to create an ID number for all its users. This system is seen by many as the cutting edge of large scale administration, and adoption of similar technologies in the financial sphere could pay large dividends.
No longer do people need an ATM or bank branch to do their banking. It can all be done on their mobile device, PC, or at convenience stores.
Services such as GrabPay, WeChat Pay and AliPay are revolutionizing the way people interface with their money, and we are likely to see more and more convenience as new technologies are widely adopted.
A common gripe with the increased mobile-ization of financial management is the difficulty of assessing credit risk. In actual fact, as mobile payments become more common, it will be possible to observe the digital footprint of individuals and judge their credit risk.
As another example, SURETY.AI will utilise blockchain technology to store claim history in a decentalised network, reducing the potential for fraud and allowing for effective risk assessment on the part of insurers.
New technology gives regulators access to more real-time financial data, helping them to carry out their supervisory role more effectively.
SURETY.AI is a blockchain based artificial intelligence (A.I) platform for insurance companies developed by Hearti Lab Pte Ltd (Hearti).
SURETY.AI allows insurance companies to connect effectively with their customers by offering micro-insurances, on-demand and at affordable prices, to Asia’s fast growing economies through Decentralised Enterprise Insurance Network.
As insurances are closely tied to healthcare, where healthcare services such as medical check records are often used for underwriting and preventive measures, Hearti is also working with Healthcare partners to integrate their services and data into SURETY.AI.
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