This financial exclusion, which is more prominent in emerging markets, is seen as a major deterrent to personal and community development. The 2017 Global Findex from The World Bank reveals that the poor “account for a disproportionate share of the unbanked [population]”. These communities resort to informal sources for their loans, savings and investments that often have unfair rates and deals. 

It is a massive pain point being addressed by financial technology (fintech). From mobile wallets to web-based platforms, fintech firms are giving unbanked communities easier and fairer opportunities to pay their bills, ask for loans, open savings accounts and more without needing a bank branch. 

While the majority of fintech efforts focus on bringing financial services to digital platforms, some start-ups are integrating physical devices with their technologically-enabled solutions.

This allows them to reach rural areas that may not have the infrastructure required to support purely digital platforms, as well as to better speak to unbanked individuals who may not be familiar with electronic services. 

One of the most recognizable hardware linked to financial services is the ATM. These machines allow individuals to access their money even if they are far away from a bank branch.

However, ATMs generally cater to individuals who already have bank accounts, and the logistics of maintaining them dissuades financial institutions from installing a machine in far-flung areas. 

One of the innovations bridging that gap is the self-service kiosk, a machine similar to an ATM but is able to be carried by several last-mile locations such as convenience stores and community shops. Numoni, a fintech firm from Singapore, is using this added flexibility of the self-service kiosk to serve the country’s underbanked population, namely its large migrant worker population.

 With its NUGEN terminals, individuals with no bank accounts can access various services such as prepaid top-up, bill payments and microlending. Through Numoni’s partnerships with telecommunication firms in Bangladesh, Indonesia and the Philippines, NUGEN users can even send mobile credit to their families all through the terminal.  

Numoni has distributed more than 100 NUGEN terminals around Singapore, many of which are located near the dormitories of migrant employees. It has also developed a mobile app version of its NUGEN terminal called NUKID, allowing merchants to offer all of NUGEN’s financial services with their smartphones.

While traditional point-of-sale (POS) terminals have been used by retailers for several decades, a number of fintech companies have transformed the device into a tool enabling the unbanked to access financial services. Individuals can go to retail stores with these POS terminals to pay for utility bills, purchase airtime and even send money, essentially turning these small retailers into financial service providers.

With the help of its POS terminals, Singapore-based fintech firm Pundi X is promoting the access of different kinds of financial services — those powered by blockchain technology.

The company provides not only a more accessible alternative to what’s being provided by banks and other formal financial institutions but also an alternative that is fairer, more secure and more accountable.

Pundi X distributes these services through the XPOS, the first blockchain-powered POS device in the world. Stores equipped with the XPOS are able to accept various cryptocurrencies such as Bitcoin, Ethereum and Pundi X’s own NPXS token as payment options, allowing customers to use their crypto tokens to purchase real-world goods.

Having only started distribution in 2018, the XPOS has been shipped to over 30 countries around the world. In Asia, it can be found in storefronts across South Korea, Taiwan, Singapore, and other countries. The company aims to distribute 100,000 XPOS devices around the world by 2021.

When experts mention the internet of things (IoT), the conversation usually focuses on smart homes or even smart cities powered by these technologically advanced devices.

Their power to gather data, communicate with each other online, and optimize themselves enables them to make large-scale operations more efficient and sustainable. It’s a technology that has found many use cases in various sectors, including finance.

One start-up using IoT to drive financial inclusion is Global Mobility Service (GMS), a Japanese technology firm enabling unbanked individuals to be able to secure loans. Drivers can install the company’s mobility-cloud computing system (MCCS) onto their vehicles, which will track its usage, location and other metrics. But most importantly, the MCCS also allows operators to restrict movement remotely, disabling the driver from using their vehicles for a set period of time.

While that may sound more harmful than beneficial, GMS’ technology has allowed unbanked drivers with no credit history to be able to apply for loans from formal financial institutions because of this feature. Should drivers with MCCS-equipped vehicles fail to repay their loans on time, lenders can simply activate the MCCS’ feature restricting the vehicle from moving, similar to a remote control. This makes the borrowing drivers more mindful of their loan requirements while giving lenders the confidence and peace of mind to lend to the unbanked individuals that need their loans the most.

Apart from Japan, GMS has also established partnerships with automotive distributors, financial institutions, and even local government units in Cambodia, Indonesia and the Philippines.

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The writer is the CEO of Blip Media Digital Marketing Consultancy, chief editor of Gadget Pilipinas and a digital solutions enabler for Comco Southeast Asia.

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