The most effective means to achieve economic and social welfare is our ability to earn a living. Earning a fair living is inexorably linked to our access to financial services. To get paid or to pay someone, to protect a few excess earnings, to borrow to buy a home, or to fund a business, we all need access to a provider of financial services. But access to finance is not open to all. Today according to the World Bank 1.7 billion people still do not have a bank account. This is a phenomenon that hits the poorest countries most, but even some of the richest countries have millions of their citizens without bank accounts.
This lack of access is resulting in poverty, social exclusion, poor health, and lack of education – robbing many of us of a fair and fulfilling life. Many reasons are behind this phenomenon: outdated processes, cultural bias, technology gaps, simply legacy mindsets, and many more. All of these obstacles – at least in part – can all be mitigated by innovation.
As with most aspects of our society, Digital technology has and is continuing to innovate and transform financial services. FinTechs, NeoBanks, and Challengers are reshaping the financial services, banking, and payments landscapes across the globe. But they are doing this prevalently for the benefit of certain segments of society, excluding some others. This particular sort of financial “discrimination” is only in small part driven by lack of access to technology, as in fact, the number of people with mobile phones exceeds the number of those with bank accounts. Again, according to the World Bank, out of the 1.7billion unbanked customers, 1.1billion own a mobile phone.
We believe that digital technology firms and enabling capabilities can dramatically reduce the number of unbanked and underbanked individuals across the world. We propose the introduction of a vision for the main actors in the industry so that every human being is given access to the financial products that they need.
Access to basic banking services should not be discriminated against. Our aim is that every individual (physical or legal entity) should be able to benefit from access to the following:
- Every person should be able to identify themselves and authenticate themselves at no cost
- Every person should be able to receive or send a payment in a safe, quick, and inexpensive manner to any other individual or organization nearby or across the globe except where these funds would be used for purposes that are illegal or harmful to others.
- Every person should be able to have access to financial products and services that allow them to gain financial benefit safely and securely from any funds that are more than their needs.
- Every person should be allowed to connect with entities that are willing to provide them with credit in fair conditions.
- Every person should be able to gain access to trustworthy information and advice on how to manage their money.
The potential issues that could arise to achieve these goals can be addressed by using processes and technology available today. We do not suggest that players should abandon all constraints and reasons in providing financial services, but we do believe that every country and government should provide the right framework to enable the following:
- A free identification document that is unalterable from birth
- A free basic digital wallet for every individual
- A free basic savings account that can earn interest where local customs do not prevent it
- Access to inexpensive domestic and cross-border payments when these funds are available in the sender’s current account
- Access to affordable credit that adequately reflects the circumstances of the borrower
- Enable any individual to own the financial data that pertains to them and to be able to grant access to financial institutions that could require the data to provide a financial product. The individual retains the right to suspend all access to their financial data from the provider unless access is justified by security concerns.
Financial services are a means for persons to live their lives to their full potential. Access to finance can no longer be a privilege.