A new report from the World Bank has recorded a massive 20% drop in the numbers of unbanked consumers, as 700 million adults worldwide joined the formal banking system and became account holders between 2011 and 2014.
Over the past three years, the percentage of adults with an account increased from 51% to 62%, a trend driven by a 13 percentage point rise in account ownership in developing countries and the role of technology.
“Access to financial services can serve as a bridge out of poverty. We have set a hugely ambitious goal - universal financial access by 2020 - and now we have evidence that we’re making major progress,” said World Bank Group President Jim Yong Kim. "This effort will require many partners - credit card companies, banks, microcredit institutions, the United Nations, foundations, and community leaders. But we can do it, and the payoff will be millions of people lifted out of poverty.”
The 2014 Findex found there is still more work to be done to expand financial inclusion among women and the poorest households. More than half of adults in the poorest 40% of households in developing countries were still without accounts in 2014. And the gender gap in account ownership is not significantly narrowing: In 2011, 47% of women and 54% of men had an account; in 2014, 58% of women had an account, compared to 65% of men. Regionally, the gender gap is largest in South Asia, where 37% of women have an account compared to 55% of men.
The indicators in the Global Findex database - set up in 2001 with funding from the Bill & Melinda Gates Foundation and in partnership with Gallup - are drawn from survey data covering more than 150,000 people in 143 economies.
Technology, and in particular mobile money, is seen to play a pivotal role in expanding access to banking services.
The biggest gains can be seen in Sub-Saharan Africa, where on average more than 10% of adults report having a mobile money account. In 13 countries, usage exceeds 10% and, among those, Cote d’Ivoire, Somalia, Tanzania, Uganda, and Zimbabwe have more adults using a mobile money account than an account at a financial institution.
Access to digital payments, through a mobile phone or point-of-sales terminal create opportunities to provide more convenient and affordable payment options, says the World Bank, which is calling on the private and public sector in developing economies to start paying wages digitally.
"Globally, paying government transfers and government wages through accounts (instead of cash) can increase the number of adults with an account by up to 160 million," states the report.