Banking the Unbanked

SAP_Bike-0218_200x300According to the WorldBank.com, roughly 5 billion of the world’s 7 billion people have no access to a bank. Many of these unbanked simply live in locations too geographically far from a physical banking branch, or they lack the immediate means to start an account. Left out of the financial system, this significant population is unable to contribute to the global economy, preventing them from building a foundation towards their own financial freedom – especially in emerging markets where opportunity is readily present.

The obvious solution – building more branches – is just as obviously untenable. However, advanced technology can provide a solution that at once leapfrogs traditional infrastructure while leveraging a recent one.

Consider South Africa. Despite their growing economy, roughly 80% of South Africans are still excluded from the formal banking system. Yet 83% have a cell phone. Standard Bank, the largest financial institution in South Africa, saw this discrepancy as an opportunity: leverage mobile technology to bring banking to more than 10 million South Africans.

In collaboration with SAP, Standard Bank launched the Inclusive Banking Initiative, breaking down the barriers that have long kept this population out of the financial system.

The engines of this operation are the Access Agents. Supported by SAP Sybase technology and mobility, Access Agents are essentially ambassadors of the Initiative: recruited and trained field workers that understand the community they work in, from the languages they speak to the local cultures they respect.

Equipped with mobile technology, Access Agents set up “pop-up” tents – temporary, mini bank branches – in remote areas. From these tents the Agents can set up accounts for new customers in less than ten minutes. Brand new account owners then receive some brief training on how to deposit and access funds, as well as some simple financial education to set them up for future success.

Now many previously unbanked South Africans have become active members of society in a brand new way. Managing their income, building credit, and even applying for loans has empowered this segment of the population to grow their communities and their country – ultimately helping them fight against their own poverty. Even those with sporadic mobile access can take comfort in some financial stability, opening doors and opportunities for themselves that were once too far to reach.

Banks all over the world are realizing a new vision of the financial system by using mobile technology to bring banking access to a once unreachable population. And 5 billion people can’t wait to see what happens next.

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