Most of us take our daily access to financial services for granted. Imagine living without access to a bank account, a loan or an investment product. That’s the reality for 1.7 billion people throughout the world. According to a study by the British
research platform Merchant Machine, Morocco, Vietnam, Egypt, the Philippines and Mexico are the top 5 countries where the unbanked population is the largest.
Why Are There Still So Many Unbanked People?
The main reason why people remain unbanked is due to the lack of funds. Many people simply don’t earn enough money to justify opening a bank account with exorbitant fees. A lack of documentation also plays a large role as many people in underdeveloped countries
do not have access to any formal identification documents. Furthermore, physical bank branches are also not always conveniently located which often brings about increased travel costs and long waiting times.
The Rise of Mobile Money and Cryptocurrency.
Mobile money has been thriving in underdeveloped countries like Africa, the continent boasting some of the highest levels of mobile money usage in the world. According to a recent report by The World Bank, mobile money services, which allow users to store
and transfer funds through a mobile phone, can help improve people’s earning potential, therefore, reducing poverty.
“Fintech innovation is the driving force behind financial inclusion, not only in Africa, but throughout the world,” says Francois Roode, Traderoot Africa Head of Business Development.
Cryptocurrencies like Bitcoin and Ethereum have grown in popularity over the past few years. Cryptocurrencies provide a faster, cheaper and more efficient way to transact. Cross border payments can be made in a matter of seconds, unlike with traditional
financial services.
El Salvador recently adopted Bitcoin as legal tender, making the digital asset an accepted means of exchange for goods and services. Your digital crypto wallet could soon become the equivalent of a bank account and a payment card all in one.
There is no doubt that the fintech industry is set to disrupt traditional finance in a significant way.