TagPay at Cl@b Feleban Miami 2017
TagPay was a proud sponsor of Cl@b Feleban 2017. The event brought together the Latin American banking sector for three days of specialized panels in Miami.
TagPay's CEO, Yves Eonnet, was invited to participate on the panel, The challenge of Financial Inclusion. Are banks ready to confront it? alongside Deloitte's Claudio Fiorillo and IFC's Nuria Aliño.
The financial inclusion challenge.
Today, two billion people or 38% of the world's adult population do not use formal financial services. There is a direct correlation between financial service penetration and income: 20% of the wealthiest adults in developing countries are twice as likely to have a formal account as the poorest 20%.
For banks, the main hurdles to reach the lower income brackets are cost of implementation of a digital financial service in excluded areas, and often complex KYC requirements to comply with regulation. For the end user, the main barriers to access digital financial services are the actual cost and time it takes to travel to a point of service, as well as literacy rates and overall education.
For TagPay's Yves Eonnet, "thanks to technology, there is a huge opportunity for banks to enter the financial inclusion market."
Open Architecture. Open Ecosystem.
With technological advances in IT systems as well as mobile phone penetration, banks and other financial service providers can now reach the undeserved with next-generation digital financial services. BBVA's Fernando Moreno explains, "banks have thought for a long time that serving the unbanked population was too expensive. But new open banking platforms can now enable ecosystems where solutions for the unbanked population are quickly and effectively developed and deployed."
The unbanked population in Latin America is 70%. For Citi's Driss R. Temsamani, adoption of digital financial services will happen with incentives, such as receiving a payments, for Uber drivers for example, and a need for credit.
Technology enabled solutions will help develop these needed services. For IFC's Matthew Saal, open platforms, APIs and artificial intelligence are allowing banks to use new data, such as social profiles and utility bill payment history, to automate the scoring of loans. Technology creates an enabling environment that is highly targeted.
For Wells Fargo's Bipin Sahni, the moment you start moving from cash to a digital economy, things are easier to manage and you can offer more to the customer.