Financial inclusion: a challenge for open banking
According to World Bank data, around 2.5 billion people in the world do not use formal financial services and 75% of poor people do not have a bank account. Essential to reduce poverty and promote prosperity (also according to the World Bank), financial inclusion varies greatly. While in Spain anyone can access the simplest bank products, such as a checking account (98% financial inclusion, second only to Germany in the eurozone), only a minority of the population in developing countries has access to these services.
Many people wonder whether the innovation and openness brought about by open banking will reduce the gap between bankarized and non-bankarized people. These three articles address this issue:
Nesta, a consulting firm specializing in social economy, points out that around 16 million British people have less than 100 pounds in their accounts and those that do not even have a bank account end up paying almost 1300 pounds a year in fees and commissions because their payments are not made within the banking system. As a solution, it suggests and run challenges for ideas with other financial institutions that wish to stop this situation.
Finextra's collaborator Ambrish Parmar welcomes open banking and its regulations but wonders whether it is actually doing something for financial inclusion. Does PSD2 commit to financial inclusion? Is there any project on the horizon, based on artificial intelligence and machine learning, which strives to tackle this problem?
Almost as a response to the previous article, this post on BBVA.com talks about fintech startups focusing on this major issue. In its various editions, BBVA Open Talent has given recognition to several companies whose business models are geared toward facilitating access to banking services to those who have yet no access. In fact, in 2018 one of the Fintech Business Awards categories was precisely dedicated to financial inclusion. The prize was given to the startup Millas para el Retiro.
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