Financial exclusion is not just a problem for the developing world according to a study by MasterCard, which estimates that more than 138 million Europeans are cut off from the formal banking sector.
Challenging common perceptions, Mastercard says that a third of those without a bank account or payment card in Europe are employed, while 35% are in the tech-toting millennial age bracket.
Ann Cairns, president international for MasterCard, say: “For many people the concept of exclusion is often seen as a developing markets problem but today’s report shows clearly that this is as much of a problem in the perceived developed markets of Europe as it is around the world. That the tools and technology are readily available to those who are in need of inclusion demonstrates that this is a solvable problem and one that partnership, education and innovation can easily solve.”
The research suggests the main reasons behind the absence of a full bank account or banking services are a lack of knowledge, and mistrust of the banking sector. A fifth (20%) do not want a bank account at all and a further 10% say they do not trust banks with their money.
While EU and national legislation focuses on mandates for banks to provide basic bank accounts, Cairns argues that the road to financial inclusion is a digital one.
"Together with innovation and education, digital prepaid solutions and electronic payments can help to bridge gap between technology and financial services," she says. "By tapping into the rapid rise in technology, we can develop new solutions to ensure everyone in Europe has access to the financial system."