Bill and Melinda Gates have shared their annual letter, which claims that mobile and digital banking will play a key role in helping the poor in coming years.
The co-founders of the Gates Foundation released the letter on Friday, predicting that the next fifteen years would see the fastest improvement of poor people’s lives in history due to advances in a range of sectors.
The couple singled out mobile banking as one of the technologies that would drive this change, drawing attention to the difficulties the poor currently face in managing financial transactions.
"The reason poor people face these agonizing choices is not just that they don’t have enough assets. They also don’t have access to a bank to help them use their assets effectively. If their savings are in the form of jewelry or livestock, for example, they can’t very well chip off tiny pieces to cover routine daily expenses." The letter stated.
The Microsoft founder and his wife also predict that digital technologies would provide the poor with better opportunities to manage their finances. The couple stated;
"But in the next 15 years, digital banking will give the poor more control over their assets and help them transform their lives."
"The key to this will be mobile phones. Already, in the developing countries with the right regulatory framework, people are storing money digitally on their phones and using their phones to make purchases, as if they were debit cards. By 2030, 2 billion people who don’t have a bank account today will be storing money and making payment with their phones."
Content from our partners
Sameet Gupte, Senior Vice President and Managing Director Europe for Virtusa, commented, "We can already see that in many emerging and developing economies, in particular in Africa, that consumers have leap-frogged internet banking and gone straight to mobile mostly due to the fact many do not have laptops and PCs or fixed line connections. Mobile offers communication at a lower price point of entry, and now that phones are much more capable, they are having an even bigger impact.
Gupte added: "According to a report from the World Bank in 2012, about 75% of adults earning less than $2 a day don’t have a bank account, more than 2.5 billion people around the world don’t have a bank account, with the poor facing bureaucratic, travel distance and cost barriers."
"Mobile banking can help to bridge this gap, and I expect that we will start to see mobile only banks in these region, just like First Direct model where there is no physical presence. We could even start to see telecom providers offering banking services in some regions, which could threaten banks traditional models and bring new players into the mix. It will be interesting to see how this unfolds."
