Financial inclusion and inclusive growth go hand in hand. 1.7 billion adults worldwide do not have access to formal financial services. That’s 31 per cent of the world’s adult population who do not have a bank account. Incapable of borrowing, saving, investing money and protecting themselves, exclusion from the global money system denies the individual some of the core conditions for economic empowerment.

Financial inclusion also aids the economic empowerment of women. With her own bank account, a woman gains economic independence and decision-making power in the home, as well as greater financial tools at her disposal to invest in her family’s prosperity and livelihood.

As Chair of Hinduja Bank in Switzerland, and especially as a woman in a position of leadership, this is an issue close to my heart. From my office in Geneva, I see how few women are as fortunate as me to make careers in the banking world. But I am also very aware that much of humanity – women in particular – remains cut off from the global money system. In the Asian and Middle Eastern markets where our bank works, for instance, young people and women remain critically underserved by the banking sector.

 Why we need financial inclusion

At its most basic level, financial inclusion is a fundamental step towards escaping poverty. It can contribute to jobs, greater food security, agricultural production, women’s empowerment, and better access to healthcare. Providing individuals with economic independence in turn empowers entire communities, collectively driving overarching economic growth and tackling inequality.

Aside from the obvious incentive of not having to store money at home, a bank account simplifies day-to-day living and facilitates a better quality of life. It opens up a safe space for saving, especially in unstable and poorer regions subject to crime, whilst providing communities with instant and secure access to their financial resources when necessary.

Access to a bank account is also likely to encourage people to use other financial services too. Account holders can use financial products to start or grow a business. In addition, entrepreneurs can gain access to insurance products that will enable them to better protect against economic risks – providing financial security and stability.

 Technological progress must not leave women behind

Digital advances are transforming the financial services landscape. In today’s increasingly connected world, two thirds of unbanked adults own a mobile phone. Already, mobile phones and the internet have made it possible to deliver financial services in new ways, improving access, reducing costs and extending services to areas where bank branches may not exist or be able to reach. Advances in payment technology and mobile money accounts have made making and receiving transactions with mobile phones reliable, fast and efficient.

In Sub-Saharan Africa, for example, communities have harnessed mobile money technology so that banking agents can reach rural clients. According to the World Bank, since 2014, though the proportion of adults with a financial institution account hasn’t witnessed a considerable increase, the number of those with a mobile money account has almost doubled to 21 per cent – showing the significance of digital solutions in tackling financial exclusion.

And yet, in today’s increasingly connected world, women are being left behind. According to new findings from the IMF, while a number of countries have made significant strides towards establishing greater financial inclusion for women, gender gaps remain. In developing countries, women are 10% less likely to own a mobile phone than men.


How private-sector partnerships can help

According to the Global Findex Database, financial inclusion has increased by 7 per cent since 2014, and 515 million adults across the developing world have gained access to financial tools. But whist great strides have been made, there is still a lot of work to be done.

Governments in the developing world must make a sustained commitment to ensuring that financial inclusion policy supports overarching financial frameworks. But it cannot be a one-sector solution.

The banking sector, for its own part, must do more to encourage and foster greater financial inclusion among existing unbanked and under-served communities. Last year, the World Bank launched the ambitious goal of Universal Financial Access by 2020. Under the initiative, over 30 partners have pledged their commitments towards achieving universal financial access.

Indeed, at Hinduja Bank, where we seek to “connect East and West” we recognise that it is in the growth markets of Asia and the Middle East where financial inclusion needs to be supported most. Fortunately, the institution is backed by a family that prioritises the wider empowerment of women and young entrepreneurs, following in the footsteps of the Bank’s founder – my father, Mr Srichand P. Hinduja – and his father before him, the philanthropist Parmanand Deepchand Hinduja.

NGOs, too, are increasingly using their local and on-the-ground knowledge to collaborate with the private sector. Here, they can support banks to determine which financial services can really benefit those from vulnerable and low-income groups. Private-sector and NGO partnerships can help to facilitate financial literacy through education. They can also play a significant role in arranging mobile phone access, for instance, specifically aimed at targeting women. A focus on remote regions could make a difference and deliver inclusive financial services for all.

It is time for the world of finance to stop catering solely to the world’s middle classes and to start including the developing world. Cross-sector partnerships will be central to boosting financial inclusion and achieving humanity’s broader development goals.