Equity, Diversity and Inclusion

Tech can reach the world's unbanked women – but only if they tell us how it should work

Almost 1 billion women worldwide have no access to financial services.

Almost 1 billion women worldwide have no access to financial services. Image: Reuters/Beawiharta

Joseph Thompson
Co-founder and CEO, Aid:Tech
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This article is part of: The Davos Agenda

• Women make up the majority of the global unbanked population.

• Lack of formal ID is one common barrier to accessing financial services.

• Understanding the needs of end users is key to the success of technology in this area.

Women make up 55% of the world’s unbanked population, meaning they have no access to banking or insurance products. For many of these almost 1 billion women globally who have no access to financial services, it means that their money is not protected, they have no access to savings or checking accounts, or financial products like insurance, credit facilities and loans.

Compounding this issue is the fact that the benefits of the digital age are not being shared equally. Women – especially those living in poor and marginalized communities – are most likely to be on the wrong side of a persistent digital divide. Two hundred million more men than women have access to the internet, and women are 21% less likely to own the mobile phone that helps them transfer money, run a business and connect with their community more effectively.

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One of the core reasons why women face this problem is due to the lack of a formal identity. According to a recently released G20 paper, Advancing Women’s Digital Financial Inclusion, co-authored by the Better Than Cash Alliance, the World Bank and Women’s World Banking, one in five unbanked women globally cite lack of a formal ID as a reason they do not have a formal bank account. Sustainable Development Goal 16.9 states everyone should have a legal identity by 2030.

Being outside the financial system has multiple drawbacks, including the inability to get access to loans, insurance or life assurance. We at AID:Tech have been thinking hard about how can we make financial services easier, safer and simpler using innovations such as blockchain and AI. But technology will not solve these problems alone. Just as developed countries use successful new technology, the one thing that all great innovations have is an excellent user experience. While building new products, it is essential to consult the very users that the innovation is intended for.

Women globally are still more likely than men not to have a bank account
Women globally are still more likely than men not to have a bank account Image: Global Findex; GPFI

That is why, with the support and partnership of Women’s World Banking, together we have been focusing on innovation for women to access financial services. The gender focus on technology is hugely skewed towards men traditionally. But that is now changing. Despite programs targeted at bringing women into the financial system, “Women face many barriers to accessing the financial products and services they need – mobility constraints, lack of collateral and limited mobile phone ownership, to name a few. One of the persistent and lasting barriers is that financial products are not designed with the needs and constraints of low-income women in mind, because little is known by financial institutions about these customers,” according to Mary Ellen Iskenderian, President and CEO of Women’s World Banking.

This lack of knowledge in women-centric product design has real economic consequences. The McKinsey Global Institute estimates that fully incorporating women into the economy would add $12 trillion to global GDP by 2025. In other words, realizing gender equality lifts all nations. There is an obvious opportunity for private organizations to innovate and build solutions to achieve financial inclusion for women.

Over the past number of years, we at AID:Tech have spoken with potential end users to better fully understand their needs, their barriers and how they view technology to better serve them. We have run pilots from delivering international aid in refugee camps, to delivering welfare to women to ensure there is full transparency on their entitlements. What we found was that successfully digitizing financial services is linked to women’s ability to prove who they are and ensure their personal information is secure. Using a digital ID can help lead to a number of positive outcomes, such as:

• Building data credit profiles

• Accessing new services to serve entrepreneurship

• Providing a safety net with automated insurance policies

• Enabling privacy and security of funds owned

One very exciting area is micro-insurance. AID:Tech and Women’s World Banking are partnering to build an innovation platform, called Caregiver, that will enable women to access micro-insurance policies. By bundling health insurance together with a loan, women micro-entrepreneurs can mitigate the risk to their households and businesses in the event of a health emergency. At the very core of the Caregiver platform will be a decentralized digital ID, which will enable users to have a verified single source of identification when presenting their details to financial institutions.

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Each year, more than 100 million people are pushed into extreme poverty in order to pay for health services, according to the World Health Organization. With UN Women estimating that at least 47 million more women and girls will fall below the poverty line as a result of COVID-19, the clock is ticking.

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Equity, Diversity and InclusionFinancial and Monetary SystemsEconomic GrowthForum Institutional
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