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How to meet financial inclusion?

To date, Fintech is seen as a driving force to promote financial inclusion globally. According to Google reports, there were about 1,000 news items about “Fintech and finance” in the past 24 hours and more than 12,000 entries in the past 7 days alone. Fintech mergers and acquisitions hit a new high of $348.5 billion in 2021, while private investment in Fintech also hit a significant high. Among them, banks are one of the key players through joint ventures.

In China, in 2018, 92% of people in Chinese cities said they used WeChat Pay or Alipay as their main means of payment. The government has authorized the development of advanced digital financial infrastructure, which is beyond the control of the four major state-owned banks. Subsequently, the launch of the digital renminbi currency was seen as the ultimate tool for achieving digital financial inclusion.

These trends seem to imply that Fintech can address Asia’s deep-seated gaps in financial access. There has been a lot of progress in the payments sector, with 41% of Asians having a mobile wallet, specifically 81% in Indonesia, 68% in the Philippines and 84% in Thailand, and South Korea and Vietnam respectively. are 29.9% and 29.1%. Mobile payments company Boku forecasts Asia will have 2.6 billion mobile wallet users by 2025.

However, analysts estimate that, while the rate of mobile payments is on the rise, only half of Southeast Asia’s population has a bank account. Being able to make mobile payments doesn’t mean users have access to savings, loans and other financial products that are the backbone of financial security and moving up the ladder. higher economic scale.

As a result, large disparities in access to finance persist. Some users in Vietnam shared that they can pay at markets, supermarkets, and retail stores by mobile phones, and can send money to their families via mobile phones. But you can’t get a loan to buy a car, or a house, or save smartly using financial products.

So to see, Fintech has made payments easier, but the economic outlook of users has not changed much. While it will take time to build the information and communication technology infrastructure, financial institutions in the region are fully capable of becoming digital banks – helping the underserved take unnecessary risks.

The question is how can organizations get started? According to Ms. Pamela Mar, Executive Vice President at Fung Group, there are several solutions to improve this problem such as:

The first, needs to enable digital access to financial services starting with basic digital literacy. In Asia, about 64% of the population has access to the Internet, but access does not guarantee that people have enough knowledge about this area.

Asian governments should continue to build hardware infrastructure, but more needs to be done to ensure soft skills deliver quality and universal knowledge. The education system must ensure that children leave school with skills relevant to life in the digital economy. Factories, warehouses and even construction sites, etc. can be part of the infrastructure to educate workers in these skills.

Second, as smartphone penetration increases, mobile learning seems to be within reach. Policymakers can subsidize or give tax incentives to the education sector to achieve high efficiency. Continuing professional development is a tool to adapt to the changing world, where everyone has access to and benefits created by the digital economy.

Tuesdayfinancial platforms need to address interoperability, including cross-border payments and data transfers, but for now the focus should be on reducing barriers to entry, through licensing conditions and compliance from regulatory authorities.

“Strengthening financial services products could boost economic growth by up to 14% in emerging markets. Even a conservative prediction of a few percentage points is enough to make a significant impact, as the region recovers from the COVID-19 outbreak. Technology is a very clear reward after all the ups and downs of all the objective effects on economies,” said Pamela Mar.


According to Diem Ngoc

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