Digital payments and account ownership are up and the gender gap in accounts has shrunk, according to the World Bank’s analysis of the Global Findex 2021 database.
In addition to financial inclusion and overall economic development benefits, the improvements are both supported by upgraded digital identity systems and support for further investment, according to the World Bank.
“The world has a crucial opportunity to build a more inclusive and resilient economy and provide a gateway to prosperity for billions of people,” states Bill Gates, co-chair of the Bill and Melinda Gates Foundation in the announcement. The foundation is a supporter of the Global Findex database.
“By investing in digital public infrastructure and technologies for payment and ID systems and updating regulations to foster innovation and protect consumers, governments can build on the progress reported in the Findex and expand access to financial services for all who need them,” according to Gates.
The lack of identity documents in Sub-Saharan Africa remains a barrier to financial account ownership for 30 percent of the region’s residents, according to Global Findex. Bank executives say this is “an opportunity for investing in accessible and trusted identification systems.”
Financial account ownership increased by 13 percent in Europe and Central Asia from 2017 to 2021, according to the latest figures. The largest gain for a developing region was Latin America, which experienced an 18 percent increase in the number of people with financial accounts.
The gender gap decreased by 4 points in the Middle East and North Africa, where 42 percent of women now hold accounts, compared to 54 percent of men.
The impact of Covid on digitization in general and adoption of remote financial services in particular is widely acknowledged. So, too, has the relationship between digital infrastructure and financial inclusion benefits, though the think tank The Brookings Institution recently argued that measuring that relationship is difficult.
The United Nations-affiliated Better Than Cash Alliance published Principles for Responsible Digital Payments in late 2021 to try to bring appropriate controls to mitigate risk to the market amid “furious growth.” The public-private alliance advocates for replacing cash with digital payment.
Some in civil society argue that digital ID growth, however, has not had the intended positive impact on marginalized communities. The United Nations’ special rapporteur on extreme poverty and human rights has expressed similar concern.
Philippines seeking inclusive registration
Meanwhile, the Philippine Statistics Authority is touting inclusivity efforts that have helped it reach 74 percent of its 92 million target for biometric registrations. The drive to issue PhilSys IDs has been credited with improving financial inclusion in The Philippines.
Statistics Authority staff have registered tens of thousands of indigenous Filipinos and people living in remote areas. A six-hour boat ride to Calayan Island with registration kits brought 8,000 more people into PhilSys. The group has also signed an agreement with the National Commission on Indigenous Peoples to ease registration access.
The latter deal was promoted by Rosalinda Batista, the Statistics Authority’s assistant secretary, as a way to “improve their access to financial, social welfare, security, health, education and other government services.”
There are now 68.3 million people registered for The Philippines’ national digital ID now and nearly 14 million physical cards issued, according to an announcement by the group.
Article: World Bank says spike in remote payments helped financial inclusion, urges digital ID investment