Data released by the World Bank in 2018 shows that there are 1.7 billion people worldwide who don’t have bank accounts. The World Bank and the International Financial Corporation (IFC) project that they will enable one billion adults to have bank accounts by 2020 through its Universal Financial Access program. However, the project may have been derailed as focus and resources have shifted to providing much-needed aid during the coronavirus pandemic. This is evidenced by an April 2020 report by the World Bank stating that 65% of adults in developing nations still don’t have access to basic banking transaction accounts.
With the COVID-19 pandemic changing how people live, work, and play, the goal of creating access to bank accounts has been shifted to educating and connecting people to more affordable digital financial services. If 65% of adults in developing countries don’t even have bank accounts, how many are those who don’t have access to digital financial services that are seen to be more affordable, more convenient, cheaper, and safer to use, especially during this time of pandemic? Can you imagine having to go to separate vendors just to pay your monthly bills in cash? Aside from costing extra for transportation, it also opens you to a higher risk of exposure to the virus. And this is why it is urgent for people to learn about and gain access to the various digital financial services out there.
“Digital financial services, powered by fintech, have the potential to lower costs by maximizing economies of scale, to increase the speed, security, and transparency of transactions, and to allow for more tailored financial services that serve the poor…. The current COVID-19 pandemic has amplified the urgency of utilizing fintech to keep financial systems functioning and keep people safe during this time of social distancing, falling demand, reduced input supply, tightening of credit conditions and rising uncertainty,” Ceyla Pazarbasioglu, vice president of equitable growth, finance, and institutions of the World Bank Group, stated in the 2020 report on digital financial services.
Aside from being able to make basic online transactions like digital payments and instant remittances at a much lower cost—the average cost to sending money using cash is 6.8%, while a digital transaction costs only 3.3%—people have the opportunity to also earn extra money by trading digital currencies at a digital asset marketplace. And who wouldn’t want added income, especially during these times when unemployment rates are at an all-time high? The solution is to spread awareness and educate the masses about the benefits of using digital financial services, while at the same time providing them access to banks and other trustworthy service providers. In this way, everyone can be connected to a digital financial system.
“It really comes down to this notion of tokenized real-world assets and tokenized securities. The ability for the industry to move to a place where almost every asset on the planet is associated or linked to digital circuitry, or a digital token or component. Because as soon as you do that, the fungibility, the transferability, the movement of all of those assets becomes completely seamless and you can do some pretty amazing things,” Roy Bernhard, CEO and Chief Visionary of digital asset marketplace Fabriik said.
The technology is already there, and with the initiative of governments around the world, it can be made available to the global population. This is what the future is about, and this is what the world needs to recover from the economic destruction brought about by the COVID-19 pandemic.