Three Challenges for Banking to Impact People’s Lives

3 min read
Oct 30, 2023 10:43:03 AM

How present is banking in our daily lives? The answer to this question is evident for people who have benefited from, or even helped build, faster banking with more features and capable of taking advantage of the latest technologies. 

However, we cannot be complacent or ignore that this banking, built around our needs, still has a lot to offer for a very high percentage of the population that, today, does not see financial institutions as present, capable of impacting their lives and improving their conditions. 

Faced with the reality that so many countries in our region share, we must create solutions that are aware of the particularities of our users and are powerful, not because they are the most innovative or disruptive, but because they are designed to be usable and in complete harmony with the needs of our users. 

Below, I want to talk about three elements that can guide our work to build a closer banking, capable of showing, at all times, that its main task is to seek to improve people’s lives. 

Improving accessibility

Many people in Latin America are forced to leave their countries of origin to work abroad to offer their families a better future. However, a large part of the money that arrives in our countries as remittances does not stay in the banks, and even today, in many countries in the region, the people who receive these funds do not even have a savings account. 

These situations show that there is a vast public that needs financial services and whose needs are awaiting innovative solutions that are sensitive to specificities. An example is Pana, a financial application that allows more than 60 million Latin migrants in the United States to send remittances utterly free of charge up to $300.

This type of innovation, which also helped to bankerize thousands of people within a system as demanding as that of the United States, is based on a deep understanding of user needs and a constant search to eliminate access obstacles.

Minimizing costs for users

The success we have seen in recent years with fintech and neobanks is owing to these organizations having dedicated themselves to understanding and creating solutions that meet the specific needs of users. 
A clear example of the above concerns the enormous number of people in our region who earn less than a minimum wage. For these people, every penny counts, and knowing that accessing a bank’s services means giving the system even a minimal part of their money makes banks an unthinkable option. 

We know how to reduce this obstacle to a minimum. We have proven it with solutions like Nequi, which in Colombia allowed us to bankerize more than 14 million people who, for one reason or another, had never used the services of a bank and now send and receive money through a digital platform for which they do not have to pay. 

Strengthening financial inclusion

There are myths surrounding the banking system that make many people stay away from it or even not know how to use it. The existing diversity in the region also confronts us with language barriers and inequality problems, such as illiteracy, preventing many people from benefiting from financial services. 
In our region, the people who most need financial opportunities and services also encounter barriers we cannot ignore, such as lack of internet access. 
Building a closer relationship with this audience is a significant opportunity to evolve and develop innovative solutions. An interesting example is Kiva, an app that emerged in 2005 in San Francisco and currently operates in several countries in Africa, Asia, and South America.

Kiva works as a crowdfunding platform in which people from impoverished communities who need financing for their ventures connect with other people who seek to contribute to projects with transformative potential for the communities they benefit. Thus, Kiba facilitates access to financial services for thousands of individuals in more than 70 countries, an achievement based on a simple strategy that deviates from the standard paths to approach and meet people’s needs effectively. 

Taking on the challenge of building a more accessible banking system capable of including a wide variety of people with very diverse needs is key to staying at the forefront of change and improving the lives of people from the financial sector.

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