More than two billion adults from developing economies are excluded from digital financial services, a new report by International Telecommunications Union (ITU) has revealed.
Digital financial inclusion can be defined broadly as digital access to and use of formal financial services by excluded and underserved populations.
ITU says that recent growth of digital financial services has allowed millions of people to perform financial transactions relatively cheaply, securely, and reliably but majority of those excluded don’t even have a formal bank account.
[quote font=”georgia” font_size=”22″ font_style=”italic” align=”left” arrow=”yes”]”Out of the 2 billion that are unbanked, it is estimated that some 1.6 billion have a mobile phone in their households and this is an opportunity to close the financial inclusion gap further.”[/quote]According to ITU, ”mobile money can be a game changer for people of limited income and an enabler for financial inclusion in developing countries.” But low levels of financial inclusion represent a barrier to socio-economic development in developing countries, the UN specialised agency says.
“Out of the 2 billion that are unbanked, it is estimated that some 1.6 billion have a mobile phone in their households and this is an opportunity to close the financial inclusion gap further
“Digital financial services (DFS) could therefore be a game changer for people of limited income and an enabler for financial inclusion in developing countries”, it adds.
“The implementation of DFS has however, not had the same degree of success in different countries. In some countries like Kenya and Tanzania, DFS usage experienced remarkable growth whereas in other countries, growth has stalled”.
To close the existing financial inclusion gap, ITU recommend that there is a need for development of international standards and policy reforms which will facilitate the adoption of inter-operable digital financial services.
As part of its effort to bridge the global digital financial inclusion gap, ITU says the 60th Anniversary edition of the International Telegraph and Telephone Consultative Committee (CCITT) which was established by ITU Member States, will explore the future of ‘Mobile Money’ as well as AI (Artificial Intelligence).
The union further says that the 60th Anniversary Talks scheduled to hold on 26th of October will offer a platform to discuss the opportunities and challenges involved in fast tracking the adoption of digital financial services and scaling up its usage.