Banks, financial organizations, and inclusion

What is it?

Inclusion for the financial sector covers a spectrum of concerns from access to products and services, to internal policies and practices. This page covers inclusion topics that are relevant to financial institutions.

Articles

This Articles section includes research papers, news articles, and other information published on the Internet.

• “Achieving Equality through Financial Inclusion” by Hamed Arbabi / Forbes. Article describing how the financial sector can address equality issues by using approaches such as digital payments, financial literacy, and new services with lower bars to entry.

• “The impact of financial inclusion on tax revenue in EMEA countries: A threshold regression approach” by Engy Raouf / Borsa Istanbul Review. A study that examines the impact of financial inclusion on tax revenue in Europe, Middle East, and Africa.

• “Financial System Review” by Bank of Canada (BOC). Summary of the financial challenges facing Canadians as well as Canadian financial institutions given tightening financial conditions, high global inflation and increased geopolitical tensions. Financial system vulnerabilities have therefore become more complex, and risks have become more elevated.

• “Productivity and the Financial Services Sector – How to Achieve New Heights” by Farah Omran and Jeremy Kronick / C.D. HOWE Institute. This article argues that economies such as Canada’s must look beyond traditional inputs and seek to increase their productivity through competition and innovation, with financial services having a vital role to play in these efforts. It provides a list of recommendations and focuses on Canada’s financial services’ regulatory framework and its impact on productivity growth through three different channels: competition, attracting capital, and the allocation of capital.

• “Canada 'sleepwalking' into cashless society, consumer advocates warn” by Amanda Pfeffer / CBC News. The trend toward cashless based transactions raises potential issues for many Canadians who traditionally depend on physical cash such as businesses and vulnerable groups. Other jurisdictions have implemented policies to protect cash-based transactions, but Canada has yet to formulate any legislation.

• “Financing SMEs in Canada: Barriers Faced by Women, Youth, Aboriginal and Minority Entrepreneurs in Accessing Capital — Phase 1: Literature Review“ by Dr. Ted Heidrick, Tracey Nicol / Government of Canada. A literature review of the financial access for Canadian SMEs. Specifically focused on the obstacles to financing based on gender, youth, aboriginal, visible minority and language minority business ownership.

• “Occasional Paper No. 8: Consumer Vulnerability“ by Martin Coppack, Yasmin Raza, Simon Sarkar, Kate Scribbins / Financial Conduct Authority. A report by the FCA in the UK about specific challenges for vulnerable population in accessing financial services. The report identifies various sources of vulnerabilities, provides case studies, as well as a practitioners guide for financial institutions.

• “Impact of Access to Financial Services, including by highlighting Remittances on Development: Economic Empowerment of Women and Youth“ by United Nations Conference on Trade and Development, United Nations. Remittances may be a source of demand for financial services and contributor to financial inclusion. However, governments will need to implement well-designed comprehensive policies to nurture the financial systems/services, financial literacy and consumer empowerment needed.

• “Financial Access“ by World Bank Group. The article looks at the process of financial access and how its implications and meanings change. It analyzes the iterations of access from the supply side and the user side, looks at how exclusion may occur directly, involuntarily and due to factors like moral hazards or adverse selections. It also looks at models under which credit systems are based and how they might be biased.

• “Monitoring the health of Canada’s financial system” by Senior Deputy Governor Carolyn Rogers / Bank of Canada. Speech by Senior Deputy Governor Carolyn Rogers discusses risks and vulnerabilities in our financial system and what the Bank of Canada is doing to support financial stability.

• “What barriers to entry exist in the financial services sector?“ by Investopedia. In the financial services markets, barriers to entry include licensure laws, capital requirements, access to financing, regulatory compliance and security concerns. The financial services sector has a complicated relationship with competition and barriers to entry due to perception of banks/financial intermediaries as a driving force behind economic stability/instability and the belief from policy makers that “excessive competition” is deleterious to the overall financial sector’s efficiency.

• “Promoting Financial Inclusion at Scale: A Canadian Perspective“ by Ahmed K. Rashid and Carolina Robino / International Development Research Centre. A roundtable was convened bringing a number of Canadian and international actors engaged in financial inclusion research and programs. The panelists shared ongoing research and initiatives from around the world, and identified areas where further programming and research is needed.

• “Keeping the financial system healthy“ by Joshua Slive and Donald Coletti / Bank of Canada. The article outlines the different vulnerabilities that the Canadian economy faces at this stage. High levels of debt, low liquidity, tighter financial policy contribute to difficult conditions among the consumer. It outlines in plain language the structure of the financial system and how vulnerabilities in one part may affect others.

• “Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries“ by Asli Demirgüç-Kunt and Leora Klapper / Brookings Papers on Economic Activity. The authors have parsed the Global Financial Index or Global Findex from 148 countries to identify the barriers that come in the way of financial inclusion. This ranges from characteristics that define the unbanked, why certain people access services and while others do not and even the factor of having minimum amount of money to utilize services.

• “The foundations of financial inclusion: Understanding ownership and use of formal accounts“ by Franklin Allen, Asli Demirguc-Kunt, Leora Klapper and Maria Soledad Martinez Peria / Journal of Financial Intermediation. Using the Global Findex data, the paper not only examines the extent to which different individual characteristics, country level variables and policies are associated with financial inclusion, but also investigates how the factors and policies associated with greater inclusion vary according to individual level characteristics.

• “Determinants of and Barriers to people's Financial Inclusion in Mexico“ by Steven Cassimon, Alessandro Maravalle, Alberto González Pandiella and Lou Turroques / Organisation for Economic Co-operation and Development. The overall paper looks at the implications of access to financial services, banks etc. In Mexico, there are certain services which are not accessible to rural population, which puts a majority of financial statistics in jeopardy as it ignores a large chunk of the population who actually need these services. Low income and high taxation become evident barriers in people wanting to even formalize their incomes. Moreover, educational barriers prevent them from understanding the services they can access, thus further reducing their accountability.

• “Fintech for Financial Inclusion: Driving Sustainable Growth“ by Dirk A. Zetzsche,  Ross P. Buckley,  and Douglas W. Arner / Sustainable Development Goals. This chapter examines why FinTech is important for sustainable development and which steps regulators and governments need to undertake to develop a comprehensive strategy to support digital financial transformation.

• “Financial Inclusion Profile: Determinant and Barriers“ by Novi V. B. Kaligis, Bernhard Tewal, Joubert B. Maramis and Maryam Mangantar / International Journal of Economics and Financial
  Issues. The article looks to understand the different definitions of financial inclusion. It goes on to define the barriers that come in way of ensuring financial inclusion, engages in a discussion about factors like age, income, education, gender, religion, access to documents of credit and etc and how they may prevent access to services.

Experiences

This Experiences section includes stories, perspectives, and experiences submitted by people experiencing disabilities or is Deaf. Where necessary, personal information have been changed to protect the privacy of the people involved.

• This section is work in progress

Other issues being raised or addressed

• This section is work in progress

External groups

The External Groups section contains links to organizations or individuals who are working, advocating, or innovating in this space. The parties mentioned in this list are not endorsed by the IDRC.

• There is nothing in this list currently.

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