Why is Digital Finance Important to Financial Inclusion?

Financial inclusion gives people access to services and support to better manage their money and make informed financial decisions. It helps them avoid getting into debt traps they can’t escape and empowers them to save for their future.

As such, financial inclusion is crucial to reducing poverty and boosting prosperity—in developing and emerging nations, and also in the developed world.

The UAE currently has a financial inclusion rate of 46%. That means that more than half of the country’s population is financially excluded. These people won’t have the simple things we take for granted such as a bank account to securely store their earnings, or a savings account that accrues interest over time.

Why is this? Well, the UAE is a country made up of many nationalities—over 200, in fact. Nearly 90% of the nation’s population is made up of migrant workers. And 60% of these are low-income.

This shouldn’t affect the financial inclusion rate. After all, the introduction of the WPS in 2009 means that employers in the UAE must provide their workers with access to a bank account. But clearly some people are still slipping through the cracks.

How can Digital Finance Increase Financial Inclusion?

While everyone on a payroll within the UAE now has access to banking, it may not be the kind of banking they need. 

For one thing, having access to banking services and those services being accessible are two very different things. If, for example, the individual in question isn’t fluent in English or Arabic, they might find it hard to communicate their financial needs or understand advice. And if that person works long, unsociable hours, they may not have the opportunity to access support in the hours allocated for that particular service.

For another thing, having a bank account does not automatically make someone financially literate. Even with free time and no language barrier, the complexity of concepts such as taxation and interest rates may be beyond some people’s comprehension when they’ve received no financial education to date. 

Indeed, only 30.7% of people in the UAE are financially literate. So how do you make sure your workforce knows how to use the bank accounts they so desperately need?

Digital finance could be the answer.

Digital finance is more accessible

The vast majority of adults in the UAE have a smartphone. This means that they can access their digital banking app at any time of the day or night.

And physical access is not the only thing digital finance improves. For example, NOW Money offers their digital banking services and support in 11 languages to better cater for the international workforce it serves.

Digital finance provides services crucial to migrants

Much of your international workforce likely send money home. Some may use a bank or an exchange house where the fees are either subject to changes in the market or are continually high. Others will use blockchain technologies and leave themselves vulnerable to market crashes and even fraud.

But when they use an app like NOW Money, they can guarantee transfers to their home countries at a low rate. And instead of waiting 2-5 days for it to get there, it will arrive within 24 hours.

Digital finance can improve financial literacy

A banking service may come with all the whistles and bells, with saving accounts and the ability to apply for loans and other types of financial assistance. But a digital finance company like NOW Money will educate your workforce on the ins and outs of financial services with on-site financial literacy workshops.

Why Should Financial Inclusion be a Major Goal for Companies?

Any company committed to helping achieve the Sustainable Development Goals will see the obvious value in financial inclusion. In fact, it has a direct impact on at least six of the goals that will make life-changing differences—for workers, for societies, and for the world as a whole:

• Goal 1: End poverty in all its forms everywhere.
• Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
• Goal 3: Ensure healthy lives and promote well-being for all at all ages.
• Goal 5: Achieve gender equality and empower all women and girls.
• Goal 8: Promote, inclusive and sustainable economic growth, full and productive employment and decent work for all.
• Goal 10: Reduce inequalities within and among countries.

Organisations that actively promote financial inclusion and work towards achieving these SDGs can expect to have a better brand image. And this could translate into the following:

• Word-of-mouth marketing: Your commitment to financial inclusion and the SDGs is a positive message that your employees and customers will want to talk about.   
• Improved customer and client loyalty: People who value ethical behaviours and social involvement will be more likely to choose you over another company.
• Increased recruitment opportunities: Companies that promote financial inclusion are sending a message that they value their employees. As such, more quality candidates will want to work for you.
• Higher retention rate: When you’re providing the tools and resources to better your employees’ economic situation, they’re more likely to want to stay.

How Your Company Can Embrace Digital Finance

There’s no question that digital finance can progress financial inclusion for people within your company. But only when it’s used in the right way. Many of your international workers may still choose to withdraw their wages in a lump sum. They may take that cash and go to an exchange house, incurring huge rates when they send money home.

That’s why providing a digital finance solution to your workers is only one step. You must also educate them on how to use the application, and why it’s important they do.

NOW Money’s financial literacy program will help your employees shift their mindset when it comes to how they manage their money, and how they prepare financially for the future. They’ll also get the following:

• A debit card, with no minimum balance required
• Fast, convenient, and secure international transfers
• Free local and international mobile phone top ups 
• Support from our dedicated customer care team

So they’ll have all the tools they need to put our lessons into practice. And you’ll have a workforce that’s more financially literate, with more opportunities, too.