By some estimates, only 27% percent of individuals in APAC have a bank account, and about 33% of businesses have a loan or line of credit. In fact, according to the recent metrics by Statista, only about 71% of APAC’s population has steady access to formal financial services. Of the large number of unbanked or underbanked populations across APAC, Vietnam, the Philippines, and Indonesia top the list of the 10 most underbanked developing countries.

As we know, being excluded from financial systems and unable to access financial products and services has a significant impact on people’s quality of life and overall economic growth in a country. For instance, access to financial services is particularly important for migrant workers in the private sector. While they remain among the highest underbanked segments, modern digital financial services supported by national financial inclusion strategies are now providing them with new ways to bank.  

However, driven by maturing markets, supportive regulatory framework, standard-setting bodies, and turbocharged acceleration due to COVID-19, Asian countries have recently witnessed a surge in customers utilizing digital banking channels in the financial sector and an increase in financial inclusion.  

In Malaysia, for example, NFC payments have risen by 288%. Over 65% of customers in Taiwan now prefer contactless payments over cash. On the other hand, Thailand reported $9 Billion in mobile banking transaction volume, all in 2019.   

For banks and financial institutions who are eyeing greater financial inclusion and financial literacy, these developments raise a critical question: How can we sustain and accelerate this increase in financial inclusion using digital financial services? 

Accelerating Financial Inclusion

The question is well-founded, and the answer is clear. Consistent innovation, digitization and financial education.  

In the APAC region, there are over 48.4 million migrant workers. However, less than 50% of them have bank accounts in Malaysia and Singapore. The reality is that formal banks just can’t provide this demographic with frictionless and swift banking experiences.  

The opportunity thus exists for incumbent financial institutions and fintechs to capture this underbanked group with the help of next-gen digital services.  

Leveraging Modern Financial Technology 

One such service is remote onboarding which is one of the first steps in financial inclusion, allowing people to avail themselves of a banking service from their mobile phones.  

Digital Onboarding and KYC are the first touchpoints that a customer encounters. Data unequivocally shows that clunky, broken CX flows, and confusing, unnecessary KYC checks decrease customer conversion by up to 50%.  

By leveraging enabling technologies, fintechs and institutions provide swift, simple digital onboarding and KYC processes. This disruption addresses a broken digital financial landscape, ensuring customer conversion and retention. Digital onboarding helps institutions reach new customers, offering responsible finance options and consumer protection.

A second avenue where disruptive technology can be used to supercharge financial inclusion is the mobile wallet space. Smartphone penetration at 64% and with over 91% of people preferring digital payments over conventional ones. These numbers undeniably show that eWallets are stress-tested propositions that are proven to appeal to consumers within the APAC region.  

APAC is home to 20% of the world’s migrant workers, and fintechs and banks play a crucial role in enabling social payments and digital remittances through eWallets. In 2020, the exchange of remittances across Asian countries exceeded $136 billion, with peer-to-peer payments experiencing a remarkable surge.

Mobile wallets are experiencing substantial growth, projected to reach 2.6 billion users by 2025. To facilitate frictionless social banking experiences, aspiring leaders can revamp digital wallets using cutting-edge technologies. This approach allows them to achieve two goals simultaneously: capturing market share and accelerating financial inclusion. By embracing innovative solutions, they can cater to consumer needs and contribute to a more inclusive financial landscape.   

Embracing And Expanding Financial Education  

State-of-the-art technology drives financial inclusion. But equally important is empowering consumers with timely financial education. Consumers must gain proper knowledge to utilize accessible tools effectively.

For instance, imagine customers unaware of your recent digital onboarding service for remote bank account creation. This lack of awareness hinders their ability to leverage the feature.Also, as you expand eWallet services across regions, educating users about best practices becomes crucial. It ensures safety, security, and optimal performance. Therefore, combining technology-driven inclusion with financial education empowers consumers and fosters a stronger financial landscape.   

In Conclusion  

At its core, technology is the prime mover for financial inclusion, but it must come with adequate education on financial products and using them responsibly.  

Consumers in APAC have displayed their appetite for digital propositions. In turn, these propositions have shaped and cemented their preferences and expectations. For aspiring digital leaders and stakeholders who want to accelerate inclusion, they must embark on leveraging the combined prowess of modern financial technology and financial education to carve the roadmap for driving financial inclusion.