Banking the Unbanked Population
According to the research most recently public by EY, around 1.5 billion adults in the world lack access to a bank account or any proper type of financial services. This makes up around 40% of the entire global population. Although the basic reasons why this is a problem are hardly worth stating, most of us don’t realize just how much the entire world can benefit from providing everyone a wide access to banking services. For one, it is estimated that simply by allowing everyone to have a banking account, some countries would increase their GPD by up to 30%, The vast majority of the world’s unbanked population is just around 25 countries.
As individuals, the benefits we get from accessing banking accounts are rather obvious, so much so that we usually take them for granted. Even the most basic financial transaction today, such as getting paid to do a job, accessing healthcare, education, etc. requires a banking account. That is not to mention the numerous security problems that can come from making every single operation in cash. At a macro level, having a large unbanked population can represent very serious problems for a country’s economy, as well as its capacity to identify its citizens and provide them with basic services such as social security or subsidies.
The question isn’t really why wider and more inclusive banking services are necessary, but rather why such a large part of the global population is still unbanked and how this problem can be solved. Lack of accessibility to banking could be attributed to various reasons, some are merely logistical, whereas others have to do with social, economic and political issues such as the lack of strong states to ensure the ability of institutions and companies to make presence in certain territories. This is added to the fact that many banking institutions profit from forms of negative interest, which make it costly for users to bank their money, something which many people cannot afford.
All in all, there is a series of large-scale structural problems related to the inaccessibility of banking services. Although the structural issues themselves are infinitely complex, there is, at least for the time being, a way for people to access banking accounts. And although this will not be the ultimate solution to the rather deep problems, it can mean a huge lead in the social and economic development of the people who hadn’t yet had access to proper financial services.
It might’ve come as surprising to some that today, it is easier for many people to access a smartphone than it is to access a banking account. From this, a widely acknowledged fact is followed, that technologies such as smartphones and computers can be the avenue to take the step towards banking the unbanked population. Most impotently, technological avenues can lead to cheaper and simpler services, which serves to overcome other less measurable barriers, such as the ones that come from traditional banking services being either too expensive or too complicated to use for some people to be worth adopting them.
But simplicity and cost are not the only relevant variables when it comes to unbanked the unbanked population. Having a high quality and versatile service is also widely important. As the EY study pointed out, the diversification of financial ecosystems, is fundamental to allow people to have wide and secure alternatives to access the financial system.
With this said, there is a company that might just be the perfect fit for this task. Novabank is an upcoming online banking platform that operates within a DLT financial ecosystem, through which users can access high security multi-currency accounts. Because of its technological edge and its ingenious business model, Novabank offers much more sophisticated services than most traditional and non-traditional banking platforms, while also being simpler and more accessible to the user. These services range from real time transfers on a global scale, which can be carried online or physically, to fund management, contactless payments and more. Because of these advantages, coupled with overall lower costs of usage, Novabank has the potential, not only to be the alternative for those who have not yet entered the financial system, but also to become the next true global leap when it comes to banking technologies for the entire financial system.