Innovation in digital payments and financial services has made it easier and safer for people to access and share money, yet 1.4 billion adults worldwide remain unbanked. To boost financial inclusion and break down barriers for financially underserved individuals, establishing trust is crucial.
Better access to financial services opens doors to increasing savings, builds financial histories and credit, improves education, and delivers new career and business opportunities.
Yet many people without access to credit are suspicious of the financial system, according to a report by international management consulting firm Oliver Wyman. This is especially true of unbanked, undocumented immigrants or people who have previously defaulted and been subject to collections.
In particular, financial institutions need to communicate with their communities in a way that speaks to their concerns and experience, with any costs made apparent and easily understood, Oliver Wyman concludes. Especially in historically underserved communities, partnerships with local, community organizations can be key to building positive relationships and trust.
Unbanked individuals may also have trouble accessing digital payment tools, while some consumers may have difficulty adapting to new technologies. This leaves these consumers in a Catch-22 situation, the report warns. They need a credit history to become visible – but they can’t build a history because they are effectively invisible.
Inclusion through innovation
Global payments brand Discover® Global Network is committed to furthering financial inclusion by building trust with consumers and helping individuals gain better access and control over their finances.
Through forging strategic partnerships with innovative fintechs, Discover aims to provide services, solutions and strategic initiatives that improve financial health by offering alternative methods for becoming ‘visible’.
“Access, control and trust can be significant barriers to financial inclusion and financial health,” says Kiran Pookote, head of network strategy at Discover Global Network. “We’re pleased to support financial innovations that help break down these barriers, allowing for greater participation and better financial health for underserved populations.”
Working with Wellthi
One such partnership is with social banking startup Wellthi, which empowers customers to achieve their financial goals by engaging social features and positive group think.
The company is the brainchild of CEO Fonta Gilliam, a former US diplomat to Asia and Africa, who was inspired by social banking traditions that are “so ubiquitous in many unbanked communities”.
“Among the greatest challenges and needs of underserved communities is the ability to pull together resources needed to achieve essential goals”
Through Wellthi, groups of people can use “age-old savings traditions” to set goals and encourage each other to save. With a social savings wallet, users set a target amount and invite people to join them on their savings mission.
According to Gilliam, the app utilises the best aspects of ‘word of mouth, group goals and peer networks’ to help people build trust in the formal banking system. Wellthi helps bring people into the banking system by instilling a trust in peer networks, as research suggests consumers are 65 per cent more likely to achieve goals after sharing their savings objective with another person.
By teaming up with Wellthi, Discover is able to assist in building an important level of financial flexibility to underbanked and unbanked communities in ways that were previously not possible.
The wallet utilises the prepaid and virtual card products of Discover Global Network to develop various use cases, including a ‘family wallet’ program to provide families a way to jointly save and spend on an aging family member who needs help.
“Among the greatest challenges and needs of underserved communities is the ability to pull together resources needed to achieve essential goals,” explains Pookote. “We’re especially pleased to work with Wellthi to support its innovative group savings wallet, which allows a group of friends, family or community to come together to save funds toward a specific goal.”
Discover Global Network and Wellthi are also working together on a program that integrates Wellthi’s social savings features and the Discover Prepaid Card for the Stepping Stones Community Federal Credit Union in Delaware in order to promote savings and financial education for low-income and underserved minorities.
Another way to boost financial inclusion is through education. By helping people become more empowered when it comes to their finances, they can take greater control of their financial future.
Through its primary financial education program Pathway to Financial Success, Discover Global Network partners with Discovery Education to bring financial education into middle and high school classrooms across the US, empowering students to manage money and make smart financial decisions.
The company is also supporting the First Nations financial program to help Native Americans understand the basics of financial management, financial markets, and financial instruments for borrowing and saving.
Last year, Discover helped provide webinars, virtual trainings and workshops to nearly 300 individuals on topics including Financial Skills for Families, Fraud Awareness, Covid Scams, the Coronavirus in Indian Country, and Building Native Communities.