Despite these numbers and the rhetoric about financial inclusion, fintech thus far has largely been about mobile payments, which is where the profit lies. Indeed, of the top 10 fintech unicorns, eight are payments platforms.
Stark differences in financial access persist. A woman in Bangkok can make purchases at the market and can send money to her family and friends and upcountry through her mobile phone. But she cannot borrow money to buy a car house or use financial products that would help her save smartly. Fintech has only made it easier to pay, but her economic prospects remain unchanged. A Filipino domestic helper in Hong Kong is in the same boat: She may use a mobile-payment system to send cash home but will anyone lend her money? Not a chance.
As fintech and digital banking open up more services to those who are already banked, Asia risks an ever wider socioeconomic divide. The old adage that you must have money to make money rings ever true.
Of course, it takes time to build the necessary physical ICT infrastructure to support richer digital financial services. But in a region with rising wealth and falling costs of technology, financial institutions are more able than ever to serve more and more new and existing customers without taking on inordinate amounts of risk.
What can be done?
Our experience working across social development, finance and technology for the public good has shown us how we might begin to bridge the financial inclusion gap.
First, enabling digital access to financial services begins with basic digital literacy. In Asia as of May 2020, 55 percent of the population had access to the internet, but simple access does not guarantee the other two components of bridging the digital divide – literacy and quality of access. Literacy is about possessing basic digital skills. The International Telecommunications Union (ITU) estimates that there are over 40 countries in the world where over half the population do not know how to attach a file to an email. Quality of access means that the users know how to tap the opportunities the internet offers.
While Asian governments need to continue to build the hardware and install the networks to support the widening array of digital services, more should be done to promote soft skills that will boost literacy and quality. Public education systems should ensure that children leave school with the capabilities necessary for living in the digital economy.
For those in the workforce, business should be involved in delivering solutions. Factories, warehouses and even construction sites could be part of the infrastructure for educating workers about digital skills. Our own experience is that when workers receive life-skills training at a manufacturing plant, for instance, there is a documented rise in loyalty, worker retention, and communication, all of which are positive for the facility’s productivity and competitiveness.
As smartphone penetration rises, mobile learning opportunities will only grow. Policy could help by providing subsidies or tax incentives for worker education on certain topics. Continuing professional development (CPD) programs are held up as a tool for people to adapt to the new world of work, but there is no reason to limit them to white-collar workers.