The financial inclusion conundrum: Different problems for fair access across the globe
As the financial services industry looks to provide easier access to around the world, the problems faced by modernized countries like the U.S. are completely different from the issues that must be addressed elsewhere in the world, making it a complex problem to fix. Trulioo Chief Executive Stephen Ufford explains the obstacles that must be resolved going forward.
Access to financial services is a global problem, with a recent FDIC survey finding that some 27 percent of Americans are either underbanked or have no access at all. It’s an even bigger problem internationally, particularly in developing countries, where banks may not have the proper means to identify potential customers and verify their financial history.
To Ufford, this dichotomy reflects how monumental of a task it is to extend fair and responsible financial services to those who are underserved — or not served at all
“It’s hard to include everybody,” Ufford told One World Identity’s Cameron D’Ambrosi on the State of Identity podcast.
In the U.S., financial systems are based on what Ufford called an “antiquated way of collecting information on consumers.” For example, a lack of ways to verify identity and reputation via mobile devices leaves out millennials, a connected generation that prefers to do business and open accounts on their smartphones.
“There is so much power in mobile, and it’s such an extension of us these days” – Trulioo CEO Steven Ufford
While the largest issue in the U.S. is the lack of upgrades to existing systems to collect and verify data, the problem is distinctly different internationally, where in many locations there is simply no system in place at all.
“We skipped a whole generation, and now there just isn’t any way to collect data, at least on a large scale, in these emerging markets,” Ufford said.
To him, the main issue is trust. Whether customers want to own a bank account, or simply establish a reputation with a company, the solution may be in mobile.
In Ufford’s view, the amount of data in mobile — that people save and share about themselves — may ultimately be the key to problems in financial inclusion and identity, both domestically and abroad.
“The power of that information, I think, can fuel the next generation of online experience,” he said. “Whether it’s opening a bank account, or sending money, or signing up for a merchant account, or transacting peer to peer, there is so much power in mobile, and it’s such an extension of us these days. This could be the piece to focus on.”