Financial Inclusion on the Rise

The percentage of adults holding bank accounts experienced a notable surge between 2020 and the close of 2023. “There were vital increases in bank account tenure From 2020, when 43% of adults were recorded, until the end of last year, when we arrived just over 58%,” said Mariela Zaldívar, attached superintendent of market behavior and financial inclusion of the SBS.

This growth reflects a broader trend toward financial inclusion, mirroring similar initiatives within the united states aimed at expanding access to banking services for underserved communities.Programs like Bank On, a collaborative effort with financial institutions to provide low-cost, accessible bank accounts, have demonstrated considerable success in enhancing financial inclusion across the U.S.

the Superintendency defines bank account possession as the percentage of people who report having a savings account, fixed-term deposit, or CTS (Compensación por Tiempo de Servicios). This definition aligns with how the FDIC in the U.S.tracks household banking status, providing a consistent measure of financial inclusion.

Zaldívar attributed this growth to the increasing digitalization of financial services. “We see a fairly meaningful increase promoted to a large extent by the digitalization of financial services,” she stated. The proliferation of mobile banking and fintech apps in the U.S.has similarly played a pivotal role in expanding financial access, particularly for individuals in rural areas or those with limited access to traditional brick-and-mortar banks. For example, apps like Chime and Varo have gained popularity by offering fee-free banking services and early access to paychecks, appealing to a younger, tech-savvy demographic.

The generational aspect is also significant. “Young people are those who are registering vital increases in financial inclusion,” Zaldívar noted.This trend is consistent with data from the Federal Reserve, which shows that younger adults in the U.S. are more likely to use mobile banking and other digital financial tools.

Pandemic-Era Account Openings

The COVID-19 pandemic further accelerated the adoption of digital banking. The distribution of stimulus checks and other government benefits prompted many unbanked individuals to open accounts to receive these funds electronically. This surge in new account openings highlights the critical role of government policies in driving financial inclusion.

In the U.S., the Economic Impact Payments (stimulus checks) were largely distributed via direct deposit, incentivizing many to open bank accounts. This experience underscored the convenience and efficiency of electronic payments, potentially leading to a lasting increase in bank account ownership.

The Disability Divide

Despite these positive trends, a significant gap persists for individuals with disabilities. People with disabilities often face unique barriers to financial inclusion, including inaccessible websites and apps, physical barriers in bank branches, and a lack of staff training on how to serve customers with disabilities effectively.

This disparity is particularly concerning given that people with disabilities are more likely to live in poverty and rely on government benefits. Without access to basic banking services, they may be forced to rely on expensive option financial services, such as check-cashing services and payday loans, which can further exacerbate their financial challenges.

The Americans with Disabilities Act (ADA) mandates accessibility in many areas of public life, including financial services. However, enforcement of these regulations can be inconsistent, and many financial institutions still fall short of meeting the needs of customers with disabilities.

OECD Evaluation and Recommendations

The Association for economic Cooperation and Progress (OECD) has conducted extensive research on financial inclusion for people with disabilities, identifying key barriers and recommending policy solutions. These recommendations include:

• Strengthening accessibility standards for financial products and services.
• Providing financial incentives for institutions to invest in accessibility.
• Developing financial literacy programs tailored to the needs of people with disabilities.
• Promoting collaboration between financial institutions,disability advocacy groups,and government agencies.

these recommendations align with the principles of worldwide design, which aims to create products and services that are usable by all people, to the greatest extent possible, without the need for adaptation or specialized design.

Deficiencies in Bank Accessibility

A significant issue is the lack of readily available services like interpreters at financial institutions. The article highlights that “only a small percentage of financial institutions provide services like interpreters.” This lack of accessibility extends beyond interpretation services to include:

• Inaccessible websites and mobile apps that are not compatible with screen readers.
• Physical barriers in bank branches, such as a lack of ramps or accessible ATMs.
• A lack of staff training on disability awareness and inclusive dialog.
• Financial documents that are not available in alternative formats, such as Braille or large print.

These deficiencies create significant obstacles for people with disabilities, preventing them from fully participating in the financial system.

Closing the Gap: How to Achieve True Financial Inclusion for All

Addressing the financial inclusion gap for people with disabilities requires a multi-faceted approach involving financial institutions, policymakers, and disability advocacy groups. Dr. Sharma, a leading expert in financial inclusion, emphasizes the importance of practical steps that financial institutions can take to enhance accessibility and inclusivity.”Financial institutions have an immense prospect and responsibility to create a more inclusive environment,” Dr. Sharma states.

Here are some key strategies:

• Prioritize Accessibility in Digital Design: This includes adhering to Web Content Accessibility Guidelines (WCAG) in website and app development, ensuring compatibility with screen readers, and providing options for text resizing, high contrast modes, and alternative text for images. This is crucial as more banking services move online.
• Invest in Staff Training: Training staff on disability awareness, inclusive terminology, and the specific needs of customers with various disabilities is critical. this training should be ongoing and incorporate feedback from people with disabilities.
• Provide Accessible Physical Infrastructure: Ensure that all physical branches are fully accessible, including ramps, accessible restrooms, and accessible service counters. Regular audits should be conducted to identify and address any accessibility barriers.
• Offer Alternative Formats: Provide financial documents in alternative formats like Braille, large print, and audio. Offer video remote interpreting or in-person interpreters to help individuals who are deaf or hard of hearing. This ensures that everyone can understand their financial information.
• Develop Accessible Interaction Channels: Ensure all communication channels – phone lines, email, and social media – are accessible and responsive to the needs of people with disabilities. This includes providing captions for videos and using clear and simple language in all communications.
• Collect Data and Monitor Progress: track key metrics related to the financial inclusion of people with disabilities, and use this data to evaluate initiatives and make data-driven improvements. This data should be disaggregated by disability type to identify specific areas where progress is needed.
• Seek Feedback from the Disability Community: Actively solicit feedback from individuals with disabilities and disability advocacy groups. Involving customers in the design process ensures that services meet real-world needs. This can be done through surveys, focus groups, and advisory committees.

Policymakers and regulatory bodies also have a crucial role to play in accelerating financial inclusion. “They can drive change through a variety of measures,” Dr. Sharma explains.

These measures include:

• Develop and Enforce Strong Regulations: Enact and enforce regulations that mandate accessibility in financial services, ensuring that institutions comply with accessibility standards and address existing discriminatory practices. The ADA provides a framework, but more specific regulations might potentially be needed to address the unique challenges faced by people with disabilities in the financial system.
• Provide incentives: Offer financial incentives, such as tax breaks or grants, to financial institutions that invest in accessibility measures and training. This can help offset the costs of implementing accessibility improvements and encourage institutions to prioritize financial inclusion.
• Promote Financial Literacy: support and fund financial literacy programs specifically tailored to the needs of individuals with disabilities. These programs should address topics such as budgeting, saving, investing, and debt management, and should be delivered in accessible formats.
• Establish Disability Advisory Committees: Establish advisory committees that include representatives from disability advocacy groups to ensure that policies and programs are informed by the real-world experiences of people with disabilities. These committees can provide valuable insights and recommendations to policymakers and regulators.
• Foster Collaboration: encourage collaboration between financial institutions, disability groups, and government agencies to develop and implement effective strategies for inclusion and accessibility. This collaboration can help to break down silos and ensure that all stakeholders are working together to achieve common goals.
• monitor and Evaluate: Track key metrics of financial inclusion and accessibility to assess the impact of policies and programs,and use this data to adjust and improve these efforts. This monitoring and evaluation should be ongoing and obvious.

By prioritizing accessibility, adopting inclusive practices, and fostering collaboration, we can ensure everyone benefits from the opportunities of the financial system. The journey towards financial inclusion is ongoing, but with concerted effort, a truly inclusive financial system is within reach.