Technology is constantly changing our lives, simplifying over-complicated processes, and making services accessible to all. Private sector companies have a crucial role in shaping our lives both individually and as a society.
Guy Kashtan is co-founder and CEO at Rewire, an online financial services platform tailored to the unique cross-border needs of migrant workers worldwide. Guy has extensive experience leading technological products that shape the way we conduct day-to-day activities.
In this article, Kashtan shares his vision on financial inclusion and the role private sector companies have in making the world a better, more inclusive place.
According to the World Bank, more than 60 countries have started developing a financial inclusion national strategy since 2010. But as the path towards financial stability starts with domestic policies, the important question of global financial inclusion remains. Naturally, the economic strength of a western country such as Germany cannot be compared to that of Nigeria, for example. Meaning that even if each country masters the issue of domestic financial inclusion and manages to care for its own population’s commonwealth, it still needs to be in line with the global inclusion efforts to prevent the preservation of global economic gaps between countries.
But perhaps there’s more than one way to globalise financial inclusion. While these efforts are indeed under the responsibility of policymakers and intergovernmental organisations, technological measures can definitely ease this struggle. In recent years, we see private sector companies that are marking positive social impact their main goal, which is equally important as financial growth. These companies comply with the idea of a ‘double bottom line’ in which the conventional, fiscal performance, bottom line is extended by a second bottom line that measures a for-profit business’ performance in terms of positive social impact.
Ideas, projects, and companies that are built on values of social entrepreneurship are sometimes the real game-changer. The secret? Focusing on the individual all while having the bigger picture in mind.
The next question is, of course, which individual? Let’s take a look at one of the most overlooked populations in the world – migrants.
Migrant workers face unique financial challenges
Today, there are approximately 270 million people across the world who migrate for work purposes. While some migrants come from strong economic backgrounds, most migrant workers originate in developing countries and are now working towards a better, more financially secure future for themselves and their families.
If you think about it, 270 million people is the population size of France, Italy, Germany, and the UK altogether. Still, this diverse population is often unseen, even though it plays a critical role in driving the economies of developing countries, such as the Philippines, Nigeria, India, Thailand, and China with 10 to 30 per cent of their GDP being attributed to citizens who live and work abroad. At the same time, migrant workers fill critical needs in their host countries as they assume roles in agriculture, hospitality, healthcare, and IT.
While relocating to a new country is now easier than ever before, the bureaucracy, especially the financial one, is as daunting as can be. Migrant workers are likely to have financial obligations in more than one country, such as paying taxes in their new home, social security payments in the country they came from, and bill payments in both countries. Furthermore, migrant workers often face day-to-day challenges that range from language barriers and cultural integration to something as basic as opening a bank account.
In western countries, we can see that while most financial institutions will accept their business, there are no dedicated cross-border solutions for the unique needs of migrants. As a result, the average migrant must face three to four financial institutions in both countries – the one in which they currently reside and the one they originally come from – just to answer their basic financial needs. This arrangement not only costs the individual unnecessary funds but also, preserves the migrant’s financial status, thus, perpetuating the basic inequality that the idea of financial inclusion aims to resolve.
The goal is to reduce inequalities worldwide
The way to address the specific economic challenges of migrant workers is three-fold and must include:
[i] accessible cross-border financial services
[ii] financial literacy
[iii] a safe space where they can consult with one another.
This is exactly what Rewire does. By harnessing the power of innovative technology and providing educational tools accessible in the migrant’s native language, Rewire is turning the aspiration towards financial inclusion into reality.
This is exactly how the principle of a double bottom line works. At first glance, the idea of global financial inclusion seems too large to grasp. I mean, we are addressing an issue that crosses all borders and essentially, relates to each and every person on the planet. But if we look into migrant workers specifically, we can see that by including them in the financial systems we are already making a substantial move towards global financial inclusion all while building a sustainable business.
Essentially, the task of reducing inequalities worldwide is undoubtedly under the responsibility of the political system. But as we can clearly see, private sector companies can do more than provide fuel for global efforts, they can actually change the world.