This document summarizes Diana Biggs' presentation on financial inclusion given at an Anthemis Brown Bag Lunch event during Financial Inclusion Week. The presentation discusses the importance of financial inclusion, barriers to access, and how digital technologies are playing an increasing role in expanding inclusion through lower-cost services. Examples of startups in areas like lending, remittances, and identity are also provided.

1. Financial
Inclusion Week
Anthemis Brown Bag Lunch
20th October 2016
Diana Biggs, Fellow 2016/17

2. This event is hosted under the auspices of Financial Inclusion 2020 (FI2020), a global multi-
stakeholder movement to achieve full financial inclusion and initiated by the Center for Financial
Inclusion at Accion. During Financial Inclusion Week stakeholders across the globe are participating
in conversations exploring the most important steps to achieving full financial inclusion, while
keeping clients first in a digital world.

3. About me
Current work + involvements:
Past work + involvements:
@dianacbiggs 2016

4. About me: past work in social enterprise and financial inclusion

5. What do we mean by financial inclusion and why is it important?
Financial Inclusion
Facilitates day-to-day living
Helps with planning & risk
management (for goals and/or
emergencies)
Enables investment, e.g. in health
and education
Improvement in overall quality of life
Financial products & services for
individuals and businesses which
are:
● Accessible
● Affordable
● Available
● Sustainable
● Responsible
● Competitive
@dianacbiggs 2016

6. Who are the financially excluded?
Currently, there are an
estimated 2 billion
adults worldwide;
groups particularly
affected:
● Women
● Rural poor
● Other remote or
hard-to-reach
populations
● Informal micro
and small firms
Image source: World Bank Global Findex Database 2012
@dianacbiggs 2016

7. What are the barriers to financial services?
Barriers to banking include:
• Cost / affordability
• Geographical distance from a
financial service provider
• Lack of necessary documentation
(e.g. ID, credit history)
• Lack of trust in providers
• Gender or religious barriers
• Lack of financial literacy / need
for education
• Lack of relevant products
• Regulation & policy (allowing
alternative service offerings;
ensuring consumer protection)
Image source: World Bank Global Findex Database 2012
@dianacbiggs 2016

8. There is increasing global recognition of the need for financial
inclusion
20161970s
Early studies
in
Microfinance
Launch of
Aadhaar ID,
India (2009)
Launch of
Kiva
MPESA Pilot
in Kenya
Enablers:
• Global ubiquity of mobile phones
• Growing access to internet / data
• Introduction of digital FS offerings / digital
cash
• Government commitment / enabling policy
• Digital ID offerings
• The problem is understood (increasing
data)
Financial
Inclusion:
enabler for 7 of
17 UN SDGs
(2015)
G20 Financial
Inclusion
Action Plan
(2010)
2005
World Bank
Universal
Financial
Access (UFA)
goal 2020
2010
Yunus /
Grameen win
Nobel Peace
Prize (2006)
MPESA launch
(2007)
Launch of
M-SHWARI
(2012)
UN Year of
Microcredit
Yunus launched
Grameen bank
(1983)
UK banks
looking at
financial edu
@dianacbiggs 2016

9. Financial inclusion means economic expansion and can bring
long-term market development… but it can also go wrong
@dianacbiggs 2016

10. The role of digital
Tech plays a pivotal role in bridging the gap between financial service providers & unbanked populations
A Digital Pathway to Financial Inclusion
Image source: Bill & Melinda Gates Foundation, Financial Services for the Poor
@dianacbiggs 2016

11. A role for digital currencies in financial inclusion?
Virtual currencies and their underlying technologies can provide faster and cheaper financial services, and can
become a powerful tool for deepening financial inclusion in the developing world.”
- Christine Lagarde, IMF Managing Director
• Global
• Decentralized
• Digital
• Instant
• Available 24/7
WeaknessesStrengths
Opportunities Threats
• Lack of governance
• Reputational issues due to link to illegal activities
• Price volatility
• Need for internet access in order to process transactions
• People know and trust cash (particularly in markets with
limited current alternatives)
• Open source: opportunities for collaboration
• Removing the middlemen: reduce corruption, cut costs
• Service populations currently excluded (e.g. for social
or other reasons)
• Elimination / reduction of physical cash has positive
implications for safety, health, logistics
• Fragmented market – inability to agree on standards?
• Over-regulation (to the point which benefits are lost)
• Cybercrime on service providers
• Lack of consumer insights from provider services
means it may miss the mark → lack of consumer
adoption due to lack of trust, education or other
• Low to no cost transactions
• Peer to Peer
• Open source (ability to
customize and code)
@dianacbiggs 2016

12. The path forwards...
• Cost of customer acquisition when
working with branch networks
• Legacy IT stacks
• KYC & AML requirements within
existing regulation for informal
populations
• FS typically takes a supply-led
approach: assumption that if something
is working here, that others will want it
• Harnessing the power of fintech / digital
• Market knowledge: “We don’t properly
understand these markets. Even the people
who think they do don’t”
• Find out how people are doing things
today >> how can this be done better
• Simplicity: asking consumers what is easy for
them to adopt; getting the language right –
how do you explain the concepts to them
• Affordability and accessibility: Low income
can mean you are hyper rational: services
need to have a good offer
Key success factors Challenges for existing systems
@dianacbiggs 2016

13. Example start-ups in this space
Credit scoring
Remittance / payments
Lending (P2P, SME)
and Debt reduction
Microfinance / mobile
banking platformSavings
Identity
Financial Literacy
@dianacbiggs 2016

14. ● The UK Financial Inclusion
Commission is an independent
commission working to address
financial exclusion in the UK; data
from 2015 report
● Nearly 2 million adults in the UK
outside the banking system:
opportunity (and responsibility) for
both traditional FS and startups to
develop products addressing the
needs of the unbanked and the
underbanked
● Technology can be an enabler, but
increasing move to digital can also
exacerbate a divide
Financial Inclusion in the UK
@dianacbiggs 2016Image source: UK Financial Inclusion Commission report 2015: Financial Inclusion: Improving the financial health of the nation

15. Headline stats
Financial Wellness state of the nationCourtesy of
Exponential
Ventures

16. Defining Financial Wellness
Half the UK population are ‘financially exposed’ to unforeseen financial
events
”Financial wellness is a continuous process of financial planning, management and behaviour adjustment with the aim
of affording your planned and unexpected expenses in order to reach your goals over your lifetime” – MMI Holdings
Courtesy of
Exponential
Ventures

17. Financial Wellness of the UK, 2016 Report
Other Factors
affecting?
Human capital?
Environmental?
Social capital?Age / Life Stage?
Geography? Physical Stressors?
Courtesy of
Exponential
Ventures

18. Financial Wellness Customer Needs
An individual's financial wellness needs can be categorised in four broad areas
Understanding a customer’s Financial Wellness needs helps to identify startups that are solving the most
significant, large-scale financial wellness challenges. These challenges need to create commercially
attractive and sustainable opportunities for startups to be viable and willing to solve them
Note: startups highlighted are simply for illustration
Courtesy of
Exponential
Ventures

19. We encourage you to follow this week’s events online at
www.fi2020week.org
and to tweet about your experience using
#finclusionweek
Twitter:
@dianacbiggs
@anthemisfellows
@anthemis