Advancements in technology have led to an epochal shift in how the world functions today. Technology plays an important role, from edge computing to ethical hacking, from augmented reality to artificial intelligence and robotic process automation.
The world is taking the essential efforts to increase financial inclusion . Financial inclusion is viewed as a critical enabler for reducing extreme poverty and increasing an individual's economic and productive capability, resulting in a better life. A surge in digital innovation has triggered a transformation that has the potential to promote financial inclusion even further.
Advancements in technology have led to an epochal shift in how the world functions today. Technology plays an important role, from edge computing to ethical hacking, from augmented reality to artificial intelligence and robotic process automation.
Fintech has catalysed financial inclusion to bring millions into the fold. Yet, there is a gender divide, and women and men do not equally access financial services. According to World Bank data from 2017, there was a staggering 30 per cent difference in the number of men and women who had an account at a financial institution in countries such as India, Bangladesh, and Pakistan.
Considering the gap, improvements were par for the course, and surely enough, developing countries like India rose to the occasion. Our country saw a significant rise in the number of women holding bank accounts in 2019–21. Unbanked women in India proactively responded to the opportunity, increasing to approximately 78.6 per cent from 53 per cent in 2015-16. Much of this was influenced by digital finance, which bolstered financial inclusion and narrowed the gender divide. Its impact is steadily breaking the shackles that hold back the underserved.
Urbanism opens doors to the best services, and a contemporary lifestyle in India, which is poised to become the world's fastest-growing economy, provides numerous luxuries. Access to banking services is one of them, which wasn't previously the case, especially in rural India. This was true for a large portion of the underbanked female population, and low mobility was one of the major barriers to formal involvement in the system. The lack of infrastructure exacerbated the situation, but in a rapidly digitising society, these issues were quickly resolved.
The rise of digital banking services and initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY) is swiftly narrowing the gender gap. Now, only 20 per cent of women are unbanked – and it won’t be long before this percentage slumps even further.
Technological solutions such as neobanks are the way forward for those who meet the minimum prerequisites to access digital services. These solutions are less expensive to deploy because they do not have the overheads of a brick-and-mortar store, thus removing the barriers that cause the gender divide. The rise of neobanks is forever altering the banking environment in India. Most fintech organisations don't demand their customers to keep a minimum balance and don't charge fees at all.
There is an inherent distrust between the underbanked population and the digital financial sector. Much of this stems from unsolved underlying problems like the threat of security and low financial literacy. Moreover, it is a known fact that the underbanked often conduct most financial exchanges in cash. As such, there was friction in adopting alternate solutions, but this too was soon a thing of the past. With the advent of proprietary banking apps, mobile wallets, and the Unified Payments Interface (UPI), security issues have become a non-issue.
In fact, per a survey in 2021, the rise of mobile wallets and UPI services were a boon for digital payment adoption among women. Upwards of 65 per cent of Indian women leveraged technology as their daily driver, and for 51 per cent of these women, it was the safety of transactions that sold them on it.
Financial literacy and the adoption of digital finance solutions are inextricably linked. Naturally, in rural areas with lower literacy levels, this has worsened, leading to other systemic problems. Fortunately, as finance grew more embedded in technology, digitisation gave birth to the education-first approach. Businesses have begun to prioritise a digitally positive financial agenda. With a multitude of learning tools at your fingertips, it's easy to get the word across. Edtech and social media have also played a role in this, making learning easier than ever.
Today, much of the world is focused on delivering financial autonomy for women, with financial literacy at the fore. Gamification is one of the technology-powered solutions that has proven effective for adult learners. So much so that a grant agreement was signed between the UN Capital Development Fund (UNCDF) and Digital Money Myanmar (Wave Money) in 2017, intending to enhance financial literacy in women through gamification.
The Buy Now, Pay Later (BNPL) solution is furthering financial inclusion. By easing access to credit for women across the societal strata, fintech companies have redefined borrowing and simultaneously increased women’s purchasing power. The solution has been instrumental in democratising credit for women. According to a survey, 66 per cent of women stated that BNPL granted easy access to credit, and 51 per cent would choose BNPL over credit cards.
The disparity in digital finance adoption between the genders is a problem, and countries are working to close the gap entirely. From the nascent stages of digital banking to advanced investing solutions dedicated to women alone, fintech’s priorities are evolving with progress. Today, with the power to invest and thrive in a previously male-dominated sphere, it is clear that technology and innovation are listening to the needs of the underserved. As we advance, the financial landscape will undoubtedly be better tuned to women's financial needs and aspirations, ensuring that they leverage it to make strides in reaching their goals.