FINANCIAL INCLUSION Financial inclusion isn’t just a matter of providing easy access to services. Rather, it’s about delivering affordable, transparent products when people need them, say Matt Williamson, VP of Global Financial Services at Mobiquity, and Andy Mielczarek, CEO of Chetwood A recent report by the UK’s Financial Conduct Authority (FCA) makes for sobering reading. In its annual Financial Lives survey, it found that more than half of the adult population were showing signs of vulnerability as a result of the COVID-19 pandemic. While that takes into account a number of factors, those at risk due to economic weakness, including indebtedness or diminished savings, had grown from 10.7 million to 14.2 million over the course of 2020. The brunt of the impact was felt by younger working adults and the self-employed, who suffered a 40 per cent rise in indicators pointing to vulnerability. The headline findings were a reversal of the trend before COVID-19, but for a significant minority things hadn’t been improving even before the crisis hit. In fact, in a prescient report in 2019, the Resolution Foundation warned the government that financially vulnerable households would be less able to weather an economic downturn than they had been before the global financial crash of 2008. And this in one of the richest countries in the world. Globally, the World Bank estimated that the pandemic will have pushed as many as 150 million people into extreme poverty by 2021. The majority of those will have no or
only limited access to financial services – one of the key ways of building resilience. For all those reasons, Matt Williamson, VP of Global Financial Services at full-service digital design enabler Mobiquity, and Andy Mielczarek, CEO of UK digital bank Chetwood, believe improving financial inclusion will be high on the agenda this year – although Mielczarek takes issue with how that’s sometimes framed in the UK. “There’s a lot of noise surrounding financial inclusion, which can no longer be thought of as just expanding reach. “For us, the biggest thing is helping with price transparency in order to support financial wellness.” Both companies already have a track record in helping build financial inclusion. Mobiquity, for example, worked with Bank ABC in Bahrain to create its digital offspring, Ila Bank, the first Cloud-based bank in the Middle East, which consciously aims to help younger generations better manage their finances. Since its launch in November 2019, Ila has become Bahrain’s fastest-growing mobile-only bank and is developing more products to encourage financial responsibility. In 2020, it launched a tool called Hassala – the Arabic word for a traditional clay savings pot – which nudges customers to save towards their goals and aspirations.
The world needs many more such solutions if everyone is to benefit, says Williamson. But they have to be consciously designed to reflect the communities they target, if they are to be ultimately successful, he adds. “Financial inclusion is an incredibly important and emotive topic, and access to financial services isn’t necessarily guaranteed for all,” he says. “But what Ila Bank did was recognise that there was quite a lot of debt among young adults in Bahrain, and the best way to access that group in order to do something about this, was via digital services. “Most people in Bahrain have access to some sort of smart device, at a low-cost entry point, and the same with data plans. But we have to recognise, that may not work for everyone, so it’s imperative that we understand how we help people through this. Digital is excellent, but we need to make sure, no one is left behind and work out how we can do it securely and safely for everyone.” Chetwood, meanwhile, uses open banking data to provide finance to those who may have been previously denied it by cruder metrics and uses a Cloud-based digital infrastructure to keep costs low. The combination of insight and operational efficiency are realised in savings to consumers.
Leaving no one behind www.fintechf.com
Issue 8 | ThePaytechMagazine
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