Offering Digital Financial Services to Promote Financial Inclusion: Lessons We've Learned

Abstract

Since 2004, interest has grown in using technology to provide financial services to the unbanked and underbanked. 1 Much of this interest is thanks to the dramatic rise in the number of mobile phone subscribers in emerging economies, which now exceed the number of bank accounts in most countries. Increased numbers of subscribers, combined with the early success of mobile money in countries like Kenya, are driving interest in mobile money and mobile financial services (MFS) to expand the outreach of financial services. Though the excitement and interest in this sector continues, the past year has seen a shift to a broader use of technology to reach the unbanked. This new area of interest, now referred more broadly as digital financial services (DFS), takes a more comprehensive view of supporting financial inclusion by involving a much broader range of institutions. Among the institutions that have provided and helped shape the new empha-sis on DFS to support financial inclusion are the Bill & Melinda Gates Foundation 2 and a wide range of public-and private-sector members in the Better Than Cash Alliance, 3 which focuses on using electronic funds transfers as well as mobile money to speed the shift to DFS. In this paper, I focus on this broader approach to improving financial inclusion via DFS and share lessons learned from a practitioner in the field point of view. John Owens is a Director for East Asia for Chemonics International and a Senior Policy Advisor for the Alliance for Financial Inclusion. He has spent the last 25 years managing projects in the field of financial inclusion and promoting digital financial services. He was the former head of the USAID-supported Microenterprise Access to Banking Services project, which was the first to use mobile money (in 2004) to pro-vide greater access to banking services in the Philippines. He has also provided train-ing and guidance to mobile money providers, banks, and regulators from Latin America, the Caribbean, the Middle East, Africa, Asia, and the Pacific Islands. He is also the Chief Editor of the Mobile Money for Development Blog.