Financial inclusion Tag

Africa is far behind in terms of provision of financial services for its bulging population, and it needs to urgently deliver a robust financial infrastructure that enables prosperity for the people.  For almost a decade, the global community and national governments have made concerted efforts to expand financial inclusion—creating a financial system that wors for all and opens the doors to greater stability and equitable progress. The progress towards financial inclusion in East Africa is evident. In Kenya and Tanzania, it is easier than ever to access financial services with only a mobile phone. But it is far different in West Africa, where the slower pace of development of mobile money has meant limited financial inclusion for some of the poorest communities on the continent. Although the root cause of this predicament is multifaceted, new thinking and innovation in financial services, which includes the provision of appropriate financing instruments targeted at this group of the population, has become critical these past years. It is clear that the main impediments to financial inclusion in Africa are the high cost of opening and maintaining formal bank accounts, the long distances to bank branches and the daunting list of personal information that banks require to support applications to open an account. Sometimes, the erratic nature of Central Bank financial policies and regulations also discourages people from engaging with formal financial institutions. These constraints have stimulated a high level of demand for alternatives to the traditional banking and financing system.   Mobile Phones to the Rescue While mobile phones are quickly becoming more affordable, digital financial solutions that are tailored to very poor and remote communities are urgently...

The financial sector is constantly coming up with useful and innovative ways of providing its services to the population. The advent of fintech (the use of technology in the financial industry) has provided a way for all entities to have access to financial products and services at a reasonable rate. Although these services have included more people in the money sector, thereby disrupting the financial world, there is still a huge portion of the world population which is largely unbanked. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way- (worldbank.org). According to a survey by Enhancing Financial Innovation and Access (EFInA), about 40.1 million or 41.6 percent of Nigerian adults are financially excluded, and 48.6 percent are financially included, while 58.4 percent are said to be financially served. This shows the sheer amount of people without access to financial services. In Nigeria people have found ways to have access to financial services and become financially inclusive; either by getting a job (their salary is paid through a bank account) or starting a business (open an account to obtain payments or credit). They then become increasingly financially inclusive by growing to having insurance, a credit account, a brokerage account, and mortgage etc. The way financial services are delivered has changed tremendously in the past century. These changes are underscored by transaction costs, which have evolved based on changes in communication and computing technology. The developments in communication and computing technology have contributed significantly in bringing...

As customers’ financial behaviors evolve to include digital banking and financial technologies—like peer-to-peer payment, virtual currency, mobile payments and mobile wallets—tokenization is one of the most important new technologies merchants can leverage to stand in the way of cybercriminal access to customer payment information. What is Tokenization? It is recommended that consumers use a paper shredder to destroy bank account statements, checkbook registers, tax forms, payment receipts and similar documents that include sensitive data because any account number reflected on the document that wasn’t destroyed beyond recognition could be used fraudulently. Similarly, when a shopper buys something online, they are required to divulge confidential and sensitive information, such as their address and ATM card info.  Giving out this information online is risky since it may be stolen and used fraudulently. Much like a paper shredder renders account information meaningless so that it’s made nearly impossible to re-assemble, repurpose or identify, the same theory applies to tokenization—through technology. Basically, tokenization is the process of replacing sensitive data with unique identification symbols that capture all the vital information about the data without compromising its security. The algorithmically generated number used to replace the sensitive data is called a token. How It Works Typical consumer credit/debit (ATM) cards come with names, 16-digit personal account numbers (PANs), expiration dates and security codes — any of which can be "tokenized." When a merchant swipes a customer's credit card, the PAN is automatically replaced with a randomly generated alphanumeric ID (“token”). The original PAN never enters the merchant's payment system; only the token ID does. The merchant can use this special token ID to keep records of the...

The financial sector is constantly coming up with useful and innovative ways of providing its services to the population. The advent of fintech (the use of technology in the financial industry) has provided a way for all entities to have access to financial products and services at a reasonable rate. Although these services have included more people in the money sector, thereby disrupting the financial world, there is still a huge portion of the world population which is largely unbanked. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way- (worldbank.org). According to a survey by Enhancing Financial Innovation and Access (EFInA), about 40.1 million or 41.6 percent of Nigerian adults are financially excluded, and 48.6 percent are financially included, while 58.4 percent are said to be financially served. This shows the sheer amount of people without access to financial services. In Nigeria people have found ways to have access to financial services and become financially inclusive; either by getting a job (their salary is paid through a bank account) or starting a business (open an account to obtain payments or credit). They then become increasingly financially inclusive by growing to having insurance, a credit account, a brokerage account, and mortgage etc. The way financial services are delivered has changed tremendously in the past century. These changes are underscored by transaction costs, which have evolved based on changes in communication and computing technology. The developments in communication and computing technology have contributed significantly in bringing...