Banks Have a $380 Billion Market Opportunity in Financial Inclusion: Accenture and CARE International UK Study
Banks can address an additional $380 billion market in annual revenues by targeting micro-enterprises and bringing unbanked and underbanked adults into the formal financial system, according to a report produced jointly byAccenture and CARE International UK, a leading humanitarian organization fighting global poverty.
The report ‘Within Reach’ notes that closing the small-business credit gap at average lending spreads and adding fee-based services could generate about $270 billion in additional revenue for banks, while including unbanked adults into the formal financial system could generate another $110 billion, according to Accenture research.
Seventy-seven per cent of the 30 banks surveyed for the report were focused on short-term profit-driven commercial opportunities in a piecemeal manner, or were driven by philanthropic ambitions, the corporate social responsibility agenda or regulatory pressures. Only 23 per cent of banks surveyed had financial inclusion as part of a coherent corporate strategy.
“The traditional view has been that banking the unbanked and underbanked tended to be low-end, unprofitable and philanthropic,” said Simon Whitehouse, a senior managing director in Accenture’s Financial Services Operating Group. “But new business models, enabled by digital technologies, are helping banks write a new rule book for what is possible.”