According to the World Bank,  there are 2 billion unbanked adults globally. While this has reduced from 2.5 billion in 2011 thanks to new products and services becoming available that serve this market better, there is still a long way to go before the goal of universal financial access by 2020 is attained.

The issue of providing banking services to the unbanked is set to be discussed at Money20/20 Europe, where they will cover the technologies and solutions which are helping to bring bank accounts to this segment of the world’s population. It is hoped that these solutions will give some of the world’s most vulnerable people the access to the financial services they need to invest in their livelihoods, protect their assets, and prevent them from falling deeper into poverty.

With the majority of unbanked people being located in developing countries, and often in remote communities, it is often the case that the traditional banking infrastructure is too expensive to serve the poor. Mobile payment technologies, such as M-Pesa, have begun to change this, with more than one billion underserved people in these markets having access to a mobile phone.

However, a great number of people in the world are still dependent on using cash for making basic payments, meaning that benefits such as reduced costs and greater speed of transactions are being missed out on - impacting those who can least afford it.

Innovation is increasing inclusion

While not all of the unbanked population need or indeed want financial services, there are a number of barriers standing in the way of financial inclusion. Many unbanked cite expense, distance, and a lack of documentation as barriers to using traditional banking services, but technology is beginning to help eliminate these issues.

Mobile is undoubtedly changing the traditional banking model by eliminating the need to have a bank account at all. Another huge barrier to opening a bank account is having an address; something that not everyone can provide;  e-wallets allow people to be able to make and receive payments without the need for a bank account. These wallets can be linked to prepaid cards which then allow the user to withdraw cash, use contactless technologies and manage their funds online 24/7/365.

What does the future look like?

There are a number of providers looking to improve access to financial services,  including national and regional government and non-government institutions, mobile network operators, and tech start-ups, all of whom are bringing distinct disruptive propositions to the table.

Mobile technologies will continue to play a huge part in financial inclusion, and contactless technologies will allow people to load money onto cards, stickers and bands, eliminating the need to carry cash, which comes with a number of risks, particularly for the most vulnerable in society.

We’re looking forward to seeing the new disruptive banking models at Money20/20 Europe. Providing innovative financial technology solutions to the underbanked has always been a huge part of what PFS does, from our recent work with prepaid schemes for asylum seekers to our partnership with Bacs to provide partial current account switching services to those wanting to gain more control over their finances.