Financial Inclusion Measurement Goes Mobile

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Date Published: 
Nov 2017
Author: 
Klapper, L.

New Global Findex data keeps pace with digital financial innovations

Leora Klapper is a Lead Economist in the Finance and Private Sector Research Team of the Development Research Group at the World Bank, and is a founder of the Global Findex database, which measures financial inclusion around the world.

Mobile banking. Photo credit: Sujan Sarkar, 2015 CGAP Photo Contest.

These are exciting times for those of us in the business of measuring financial inclusion. Technology is remaking the financial system every couple of years – and we're adapting the Global Findex survey questions accordingly. Our new data, which we're launching in April 2018, features bundles of new questions on financial services accessed through mobile phones and the internet.

We started collecting data for the first round of the World Bank's Global Findex database – measuring how adults in more than 140 countries worldwide save, borrow, and make payments – in 2010. Back then, our survey asked people about their use of paper checks.

Mobile money was so nascent that we had a few questions about mobile payments, but nothing about mobile money accounts. That came later, with the vastly expanded mobile money module in the 2014 Global Findex.

Rise of digital financial services

How times have changed. The mobile money industry group GSMA reports that mobile money is now available in two-thirds of emerging countries, up from a small handful of countries ten years ago.

Other payments systems drawing on mobile and internet technology are taking off. In China, the combined value of Alipay and WeChat payments has surged twenty-fold in the last few years. Feeling the pinch of an increasingly cash-free economy, even homeless newspaper vendors in the United States are rolling out digital payments platforms.

Recent years also saw an avalanche of studies highlighting digital financial inclusion's ability to drive development. Women's empowerment, food security, lower corruption, and higher spending on food and education have all been linked to usage of financial services.

Governments have responded by launching official financial inclusion strategies. An overview of bank regulators in 143 jurisdictions found that two-thirds have an explicit mandate to promote financial inclusion. Brazil offers a glimpse of where these policies might be leading. Last year, regulators paved the way for fully digital accounts, which can be opened entirely through mobile phone or internet technology without having to visit a bank branch.   

Women looking at mobile phone, Indonesia. Photo credit: Dede Sudiana, 2015 CGAP Photo ContestNew survey questions for measuring digital financial inclusion

The challenge for us is to capture the evolution in digital financial services in a reliable, comparable way. That's not only important for research purposes. Without accurate data, governments can't identify financially excluded people and tailor policies to better serve them. Good data is the raw material with which good policies are built.

We thought about these challenges a lot as we designed the survey questionnaire for the forthcoming Global Findex update. For example, in China, we rode with taxi drivers who asked us to pay using a WeChat or Alipay ‘e-wallets’ and bought from street vendors with QR code placecards on their fruitstands for quick, convenient and safer payments. This led us to add a new module to Findex on how self-employed adults receive customer payments and more nuanced questions on payments using a mobile phone.

Ultimately, we came up with a few ways to capture the rapid changes that have occurred in the financial industry since we put out the 2014 Global Findex. Here's a sense of what to expect.

  • Revised questions on digital consumer payments. Our survey asks people if they pay bills online, and if they make purchases online. And in emerging countries, if the answer is yes, the survey asks how delivery fees were paid for – in cash or digitally. 
  • New data on employment and payments. Self-employment is the most common form of employment in most emerging countries. We wanted to get a better sense of how and whether these people use digital financial services to run their businesses. Toward that end, the new survey asks people if they are unemployed, and if they say yes, it asks how they receive payments.
  • New data on access to mobile phones and the internet. The new Global Findex will incorporate Gallup World Poll data on access to mobile phones and the internet. We'll be able to answer questions like – How many adults are unbanked, have a mobile phone, and get government transfers in cash? The answer will reveal opportunities to expand financial inclusion by leveraging digital technology.
  • Fresh data on mobile money. We'll be updating our 2014 indicators and looking for deeper insights on how and whether mobile money is increasing financial inclusion for women and poor people. We hope the data will also offer a sense of just how much mobile money access has increased since 2014.

We've just started looking at the new data, and we're not launching the 2017 Global Findex until April. In the meantime, follow us on Twitter @globalfindex for 2017 updates, and check out our recent webinar for more information about how our data can serve your research needs.


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