Can Financial Inclusion Bridge The Gap In Banking Services?

The ability of banking services to reach all income levels of society, not just a certain group or group, is called financial inclusion. I can claim that financial inclusion will eliminate the differences in banking services if the right strategies are developed by taking local conditions into consideration.

Financial inclusion policies include developing different service concepts for banks’ users at different income levels. While customized banking offers can be offered for wealthy and high-income customers, different solutions should be offered for the financial needs of low-income customer profiles.

For countries that can be described as emerging markets, financial inclusion is an important concept for banks. It is essential for both their own development and the increase in the welfare level of the citizens of that country.

If both the state, non-governmental organizations and banks have a common understanding of services and regulations aimed at maintaining financial inclusion, it will be very easy to eliminate the huge gap in banking services.

What Does Financial Inclusion Mean For Underserved Populations?

The customer profiles that will benefit most from the financial inclusion service approach are underserved populations. For example, the ability of customers with low income levels but who want to access their banking needs to manage a better economy, develop savings strategies and evaluate loan options depends on financial institutions providing services with the principle of financial inclusion.

When banks serving in emerging markets do not provide banking services with the principle of financial inclusion, they cannot produce flexible solutions to local problems and cannot provide efficiency in their work areas. 

However, when banking services are provided to customer profiles at all income levels of society, from low-income to high-income, there will be an increase in the welfare level and profit margin of both the bank and the country.

How Are Fintech Companies Driving Financial Inclusion?

Fintech companies generally aim to launch their innovations and startups with the principle of financial inclusion in order to reach a larger number of customers. Fintech solutions designed only for a certain group will develop in limited quantities and bring less profit margins to fintech companies.

However, fintech companies that invest in projects that provide solutions to more comprehensive financial needs will manage more profitable projects.

We can advise fintech companies that produce technology solutions in the field of finance and aim to transform creative ideas into products or services to meet financial needs, not to forget the principle of financial inclusion. Being inclusive of the new financial products or services that fintech companies invest in and launch allows them to achieve higher profit margins and a more equitable banking ecosystem.

Some examples of banking services that can be implemented within the scope of financial inclusion for fintech companies include: microcredit options, savings plan development applications, digital wallet solutions, etc.

What Role Do Mobile Banking Services Play In Financial Inclusion?

Thanks to mobile banking solutions, access to banking services has increased significantly. Mobile banking services make significant contributions not only to international banking services but also to meeting the daily financial needs of customers at different income levels. 

Thanks to this feature, we can count the mobile banking solutions of banks or financial institutions within the scope of the financial inclusion principle.

Today, mobile banking solutions are accessible to everyone, which ensures that different customer profiles receive equal and fair banking services. Mobile banking services, which provide equal banking services to the whole world due to both easy access and fast access, appear as a solution for ecosystems that want to provide financial inclusion.

Traditional banking services are more limited in terms of financial inclusion than online banking solutions. The fact that banks or crypto exchanges allow us to manage all our financial transactions through mobile applications or websites is a good example of the concept of financial inclusion.

How Can Governments And NGOs Promote Financial Inclusion?

Not only private financial institutions and banks, but also governments and legal regulations must support the successful completion of financial inclusion. Regulations that will encourage financial inclusion policies can be presented by states.

Governments should have deterrent sanctions against financial institutions that undermine the principle of financial inclusion by skipping the understanding of equal banking services.

In addition, NGOs can also carry out projects to emphasize the importance of financial literacy and financial inclusion and raise awareness on this issue. It is seen that the principle of financial inclusion is not missed in the banking services of developed countries.

It is known that in the economies of developed countries, governments offer policies and regulations that encourage the financial inclusion ecosystem for financial institutions. We should recommend that banks serving in emerging markets achieve a more comprehensive service understanding by using this correct and successful model.

At the same time, campaigns carried out in cooperation with non-governmental organizations are also useful from time to time to raise awareness.

Is Financial Inclusion A Profitable Endeavor For Banks?

Financial inclusion is recommended not only because of ethical concerns but also because it is a more profitable banking model. For example, let’s say you manage a bank serving in the emerging markets region.

At first glance, financial inclusion for banks seems like a phenomenon that should be provided for ethical concerns, not for profit margin, but in the long run, reaching more customers will enable the formation of a more profitable transaction network in the banking services sector.

If you offer policies and services that are aware of local conditions and the financial needs of customer profiles at different income levels of the society, including disadvantaged groups, you will manage a more profitable banking enterprise.

To reach a financial inclusion ecosystem, providing banking services such as offering customized loan options for low-income customer profiles and consultancy on savings strategies enables the bank to be more successful by reaching more customers.

See you in the next post,

Anil UZUN