Citi says that the affordability of financial services fell by 3.2% in high-performing countries, but grew by 2.3% in emerging ones – highlighting that many countries in the developed world are still struggling to bring their unbanked and underbanked in to the digital fold.
“The efficiencies and cost savings of moving to digital money are potentially staggering,” says Greg Baxter, Citi’s global head of Digital, “and the social benefits from wider financial inclusion enormous. It is therefore a concern that the Index is highlighting a risk that some low-income countries and potentially even low income segments within developed countries could fall irretrievably behind in the digital economy.”
Citi’s research finds that true adoption of digital money can only happen when there is a concerted, holistic effort that includes a supportive institutional environment, financial and ICT infrastructure, digital money solutions from government and the private sector, and enthusiasm from consumers and businesses. One country that has done so is India (with a year-on-year improvement by almost 10%) and the report scrutinizes some of the key digital money initiatives its government, with the help of the private sector, has pushed through in recent years.
“No-one is saying it is easy,” continues Baxter “but it does seem that developing countries have some salutatory lessons to offer even the world’s digital money leaders. Go back to basics, ensure there is true interoperability, incentivise the unbanked and underbanked and do not forget the power of evangelism. Not only will you reap the rewards, but you will also minimize the threat of lower income citizens being further left behind.”