Book chapter summary Author: Diana Biggs Publication: Bank Beyond Banks (Springer International 2016)

1. Book Title: Banking Beyond Banks and Money
A Guide to Banking Services in the Twenty-First Century
Springer International Publishing, Copyright 2016
Chapter summary: How Non-banks are Boosting
Financial Inclusion and Remittance
Print ISBN: 978-3-319-42446-0
Online ISBN: 978-3-319-42448-4
Series Title: New Economic Windows
Author: Diana Biggs

2. Background
● Financial inclusion is the delivery of
financial services at affordable costs
to sections of disadvantaged and
low-income segments of society
● Financial access is the gateway to
education, health, housing and other
necessities to growth and
development, and critical for access to
economic opportunity
● Two billion people do not have access
to formal financial services
● There is therefore the opportunity for
non-banks to provide such services to
these markets
Chapter 10 Summary: How Non-Banks are Boosting Financial Inclusion and Remittance
Author: Diana C. Biggs
Technologies discussed in the chapter
Mobile banking
● The provision of financial services via mobile phone, which
are increasingly ubiquitous globally
● Mobile money is already a fairly mature industry, with
established offerings in the majority of emerging economies
● As of 2014, the number of mobile money accounts
outnumbered bank accounts in 16 countries globally
Blockchain-based remittances
● Global remittances estimated to be $586BN in 2015
● The global average cost of sending $200 was 7.7 % in the
first quarter of 2015,
● The bitcoin blockchain offers near real-time peer-to-peer
transaction processing 24/7 bringing potential benefits
across the value chain in remittance
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3. ● Need for connectivity (mobile or internet)
● Regulatory, legal & policy challenges: need to
ensure regulation and policy does not hinder
innovation
● Early-stage technology: requires coordination
and mass adoption
● Consumer adoption / trust
● Scalability and interoperability between
systems
● Relevant off-ramps and usability of digital
money systems in order to reduce the need for
agents and potential issues with local liquidity
● Given the costs related to logistics, geographical
challenges, technology (or lack thereof) and
regulation and compliance, potential cost
savings for the customer still require smart
management on the provider side
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Chapter 10 Summary: How Non-Banks are Boosting Financial Inclusion and Remittance
Author: Diana C. Biggs
Opportunities include: Challenges include:
● Improved efficiencies: increased speed of
payments and lower costs to send and
receive over traditional methods
● Enhanced security, monitoring, and
transparency
● Allows for broader geographical coverage,
removing physical barriers and reducing
travel times & costs
● Serves as a convenient initial entry point into
the formal financial system
● Reduces the need for middlemen, reducing
corruption and cutting costs
● Enables servicing of populations currently
excluded (e.g. for social or other reasons)
● Elimination / reduction of physical cash has
positive implications for safety, health,
logistics