The Who, What, When, Where, and Why of Financial Inclusion

According to the World Bank there are 1.7 billion unbanked adults in the world. In the United States, this number is just over 14 million, representing more than 6% of all households in the country. Analysts have suggested that, in Europe, while there are some well-banked countries (Germany, the Baltics in particular), there are others, especially in Central and Eastern Europe, where large numbers of citizens lack access to basic banking services. In Romania, for example, more than 50% of the country’s adults are unbanked.

I should say at the outset that it is impossible for me to write about financial inclusion without tipping my cap in the direction of Tosin Agbabiaka. An investor with Octopus Ventures, Agbabiaka’s presentation on what he called “Financial Inclusion 3.0” at FinovateEurope in February was as fascinating a discussion on the topic as I have come across. Catch his conversation with Finovate VP and host of the Finovate podcast Greg Palmer from earlier this year.

For our purposes, let’s start with the World Bank’s definition of financial inclusion. The World Bank defines financial inclusion as providing individuals and businesses with access to useful and affordable financial products and services that meet their needs. This leads us to ask: in the current context of COVID-19, nationalism, and lingering economic inequality, how can we achieve a financial inclusion worthy of the times we live in?


One important question to ask when it comes to financial inclusion is quite fundamental: what are financial services trying to provide? There is a danger in “porting” services and solutions to one community simply because they may have worked in another. At a time of rapid technological innovation and adoption – such as we are in right now – this temptation can be difficult to resist. But failure to understand the specific needs of a given community – greater access to earned wages, or the ability to pay cash for online products or services, for example – can result in not only the failure of a well-intentioned initiative, but also potential negative feelings toward the idea of trying new technologies in the future.

This is one of the ways that fintechs can play innovative roles by developing solutions that highlight needs – such as broader access to cash – that may seem niche or be overlooked entirely by traditional, even community-based, financial institutions.


Who should be included in mainstream financial life? While the answer “everyone who wants to” is obvious, it is also insufficient. Who is going to make the investment to provide financial services in areas where the market may be broad but thin? Even more problematic are those needs that are severe, but relatively narrow and not easily remedied by methods successful in communities where conditions are different. Countries and regions where incomes are low and inconsistent, trust in traditional institutions poor, and the stability of the currency itself at times an issue come to mind.

And in the same way that the conversation on inclusion rightly has emphasized the importance of gender and ethnic diversity, it is also important to think about other communities that have been traditionally excluded from or had severely limited access to financial services. Families and businesses in rural areas and in farming communities, many of whom it should be mentioned are women- and/or ethnic minority-led, are often the most overlooked communities in financial life. This is true both in the developed and developing world. A recent broadcast by journalist Chris Hayes on the eve of Thanksgiving highlighted the life and work of those whose job it is to put food on the tables of millions during the holiday season. It was a helpful reminder of how “essential” this work is and these workers are, and why any financial inclusion must respond to their needs as well.


Meeting underbanked populations in the communities where they live is a critical component of not only providing them with the financial products and services they need, but also of engaging with them and learning about what those needs are in the first place. Outreach into ethnic minority neighborhoods via civic and even public sector institutions is one first step financial institutions can take, as is partnering with minority-, women-, veteran-, and LGBTQ-led businesses who have firsthand knowledge of the needs of their communities.

This is also true for virtual communities. In some instances, for example, offering financial services to underbanked individuals with mobility, sensory, or cognitive challenges may mean less outreach to physical neighborhoods and more engagement with online communities and networks.


One truism about planning drawn from the world of professional hockey is the idea of skating not to where the hockey puck is currently, but instead, by accurately judging its trajectory, skating to where the hockey puck is going. Similarly, those looking to provide financial services to underbanked communities should be as alert to their future needs as they are to the current needs in those communities.

Some trends are easier to anticipate than others. If we believe that Millennials in general, for example, are entering their prime family formation years, then what is the appropriate response from the financial services and fintech community? I would argue it is an excellent time to intensify outreach to young women, as well as Millennials who are members of ethnic minority groups who might not have the same access to the kind of financial planning resources that are critical when starting a family. A special effort to engage young members of underbanked communities about financing opportunities for higher education seems like a similarly worthwhile effort for banks and community-oriented financial services organizations in late winter and early spring, as well.

But no crystal ball is required. Again, engagement with underbanked communities is key. The easiest way to know which way the train is headed is to climb on board.


Whether driven by rational self-interest, an renewed altruism, or some combination of the two, the growing desire to bring financial services to those who do not have them – and want them – is one of the most important developments in fintech and financial services. There will be missteps, overreaches and embarrassing assumptions along the way. And in the eyes of some critics and skeptics, this will be evidence that the cause is hopeless or that those attempting to fulfill it are incapable.

But, to steal a phrase, ensuring that the blessings of technology and modern, wealth-building financial services are available to as many people as possible, may be as important a goal as any other in our industry. And at a time when more people are seeing banks and other financial services providers in a brighter light than they have in a decade – thanks to their recent participation in PPP financial rescue efforts, for example, and the fading memories of the Great Financial Crisis – there may be no better time than the present to pursue it.

Photo by Dani Hart from Pexels