The shift towards digital banking can have both positive and negative impacts on people who are unbanked. Positive impacts:
- Digital banking and mobile financial services have significantly increased financial access for unbanked populations, especially in regions like Sub-Saharan Africa. This includes mobile banking apps, digital wallets, and AI-based credit scoring that open up financial services to those without prior access.
- These digital tools can empower unbanked individuals by providing 24/7 access to banking services such as checking balances, paying bills, and accessing credit scores, supporting financial literacy and engagement.
- Governments, fintech, and financial service providers can lower barriers by improving infrastructure like mobile phone access and trusted identification systems, which can increase account ownership among unbanked individuals.
- Digital payments can provide a way to receive wages or government transfers safely, which is a proven method to encourage opening of accounts among the unbanked.
- Financial inclusion through digital banking can promote economic growth, reduce poverty, and improve financial resilience among underserved communities by enabling easier saving, investing, and credit access.
Challenges and negative impacts:
- A major barrier remains the "digital divide," where poor or rural populations lack internet access, digital skills, or smartphones needed to use digital banking effectively.
- Many unbanked adults require help to use digital accounts, which can expose them to risks of financial abuse and fraud if proper consumer safeguards and literacy programs are not in place.
- Affordability of devices and connectivity, distrust of traditional financial institutions, and low financial literacy continue to limit the benefits of digital banking for some unbanked groups.
- Without efforts to enhance digital infrastructure and education, the shift to digital banking could further exclude those without access to technology or digital skills.
Overall, digital banking holds great promise to increase financial inclusion among the unbanked if accompanied by targeted infrastructure development, education, and consumer protections to bridge the digital divide and build financial capability.
This summary reflects a broad consensus from recent studies and reports from 2023-2025 on the topic.