April 8, 2020

How Open Banking can Accelerate Financial Inclusion

Having a bank account is a privilege. Over 1.7 billion world citizens are excluded from the benefits and entitlements provided by access to a bank account. Almost two billion people have no access to affordable financial products addressing their specific needs. Almost two billion people have no way to make payments other than cash, convenient savings mechanisms and no access to fair credit or insurance. This egregious societal failure should be, and could be, eradicated.

In my work with the Open Bank Project, assisting banks and regulators around the world in shaping their open banking strategy, I’m often asked, “How can Open Banking address financial inclusion?’

I had the opportunity to dig into this question last year as I traveled across Latin America for client engagements – kudos here to the World Bank and IFC, with whom we have done most of our work in Latin America. My experiences in Mexico, Colombia, Peru and Brazil, countries where financial exclusion is an everyday reality, and my exchanges with local banks, micro-finance institutions, regulators, FinTechs and members of civil society helped to crystallise my thoughts. I’m glad to share with you here some of the discoveries and key learnings from that experience.


Financial inclusion means both access to financial products (e.g. having a bank account) and usage (e.g. using the bank account to make transfers rather than merely withdrawing funds once a month). We have ample evidence that a well-designed and balanced Open Banking programme can increase banking activity. Indeed, by providing access to transaction data and enabling low value payments, Open Banking can help foster innovation by addressing the underbanked and stimulating the competition to reach new markets and more users. Open Banking enables innovative actors to develop new services targeting the underbanked, building credit capacity and offering legitimate alternatives to loan sharks and other malicious financial practices which target the poor.

Let me show you how Open Banking helps achieve financial inclusion.