Journal of Payments Strategy & Systems: The Commercial Viability of Financial Inclusion

Mobile phone penetration, regulatory trends, technological efficiencies and the development of low-value payments infrastructures now make it feasible for financial institutions to deliver financial services to more people in more places.

With a few basic prerequisites in place, financial institutions are now able to develop commercially viable approaches to financial inclusion. However, they must first rethink traditional notions of 'viability' and approach inclusion as a long-term strategic play rather than a short-term profit play.

Moreover, the regulatory and infrastructure hurdles are so significant that achieving scale will require public–private partnership. The financial services industry is characterised by its focus on short-term financial metrics and quarterly reporting. Because financial inclusion efforts are a longer-term play, they are typically relegated to CSR initiatives. The model described here allows for a longer-term, strategic approach to product and service development within a financial institution's core business functions.