There is no doubt that mobile technology is empowering the world’s unbanked. It allows underserved individuals to gain more access to the financial tools they need, all the while making it possible for them to utilise services through the convenience of a smartphone. In fact, the mobile technology sector has made significant strides in reducing the number of unbanked people globally over the past decade.
The term unbanked refers to individuals who do not have access to traditional financial services such as bank accounts and loans, often due to a lack of financial market infrastructure in their area. Since they do not use banking institutions in any capacity, including savings accounts or credit cards, it is especially difficult for unbanked individuals to make payments and access credit.
Incapable of borrowing, saving or investing money, exclusion from the global money system strips unbanked individuals of some of the core conditions for economic well-being. Therefore using mobile technology to fundamentally empower entire communities through financial inclusion collectively drives overarching economic growth and tackles inequality.
According to the World Bank, 1.4 billion adults are still unbanked and at risk of financial exclusion due to a lack of resources in their low-income communities and a lack of awareness about the financial services available. More than 55% are women, who may live too far away from banking institutions and are unable to travel alone or afford travel costs, making it difficult for them to move around and get a basic bank account or a single debit card.
However, modern technology has provided a solution to this problem by allowing underserved people to access financial services via mobile phones rather than travelling to large cities and paying huge fees to access a basic human right.
More specifically, mobile technology makes it possible for users to perform a range of financial transactions using their phone, including opening and managing bank accounts, making and receiving payments and applying for loans. This is particularly useful for individuals in remote areas, as it does not require a physical bank branch or internet access. For instance, communities in Sub-Saharan Africa are harnessing mobile money technology so that banking agents can reach rural clients.
For instance, BABB is committed to the pursuit of building a financially inclusive world where technology and decentralised finance can work for the benefit of humanity. An example of this lies in the upcoming Hybrid Money Account that keeps fiat, cryptocurrencies and stablecoins safe and secure in one regulated app with affordable conversions of fiat currencies. BABB offers free-of-charge account registration and users can even send funds globally to other users inside the mobile app for free, making it more accessible to all individuals, including the financially excluded who don’t have access to physical bank branches.
Furthermore, one of the key ways in which mobile technology has reduced the number of unbanked people is through the proliferation of mobile money services. Mobile money is a financial service that allows users to store, send and receive money using their mobile phones. It is typically offered by telecom companies or financial institutions and can be accessed through a mobile app or USSD (Unstructured Supplementary Service Data) code.
Data from the World Bank shows that in Sub-Saharan Africa, mobile money accounts drive a huge increase in financial inclusion since they account for more than 60% of all financial transactions in the region.
Overall, the broad-based digitisation of financial services has led to the proliferation and mass adoption of mobile banking and online payment services, thanks to their convenience and ease of use.
In particular, the mass adoption of mobile banking, which has been accelerated by digitisation, has had a number of benefits for both consumers and financial institutions. It has provided consumers with the ability to seamlessly manage their finances and access accounts anytime, anywhere, through their mobile devices. For financial institutions, mobile banking has provided a new channel for customer acquisition and retention, as well as opportunities to expand their product and service offerings.
For mobile technology and broad-based digitisation to have a long-lasting impact on underserved areas, challenges such as cybersecurity and regulatory concerns must be dealt with. This, in addition to increasing financial literacy in remote areas, will improve the overall efficiency of financial transactions and remove barriers to financial inclusion, making it possible to achieve a continuous decline in the rate of unbanked people globally.
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BABB is an FCA-registered company based in London, operating in the financial technology industry. The company was founded by Rushd Averroes in 2016 and focuses on decentralized banking systems offering peer-to-peer money and crypto transfer, mobile banking app, Social KYC, and the Black Card.
For more information, view the website here: https://getbabb.com/money/
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