A recent study of 2,000 global consumers by Mambu, a banking and financial services platform, revealed that both banked and unbanked individuals feel underserved, with 56% of banked customers claiming that there are other services they should be able to access.
“With more than 290 million unbanked adults across Southeast Asia, exclusion from formal financial services remains a significant problem for people throughout the region. What’s very interesting to note from this survey, however, is that even consumers who are formally banked have reported gaps in financial accessibility,”
said Pham Quang Minh, Mambu’s General Manager Vietnam.
“Vietnam has a very young population and one of the highest rates of mobile phone ownership in the world, which is one of the reasons why we’ve seen such an explosion in the use of mobile payment technologies. There is a huge appetite for digital financial services in this country, which has been accelerated even further by the COVID pandemic, but it is very important that banks and financial institutions work to proactively close the gaps in financial accessibility and awareness identified in the Mambu survey.”
Gaps in financial accessibility for both banked and unbanked consumers
While Mambu has seen recent developments in technology bringing financial services to more people across the Asia Pacific region, the state of financial accessibility across several markets tells a different story.
This was shown by the one in four (26%) unbanked who believe that financial institutions could help them get a bank account by providing more personalised financial advisory services.
The difference between banked and unbanked may seem pretty distinct, but Mambu’s research found a financial accessibility gap amongst both groups, as well as a gap in understanding of financial accessibility.
This proved true when it found that 81% of banked customers felt their situation would be better if they knew more about how finances worked, with more than half (58%) of unbanked customers feeling the same.
Innovative fintechs working to improve financial awareness and accessibility, but banks falling behind
Gaps in financial accessibility have really come to light during the COVID-19 crisis, with 77% of respondents noting that the pandemic has highlighted the importance of being able to understand and access a wide range of financial services. However, consumers also reported that financial institutions aren’t taking the necessary steps to boost accessibility.
The pandemic has also had a significant impact on the Vietnamese financial services sector, particularly in the acceleration of digital transformation and adoption of new digital technologies.
In Vietnam, Mambu said that it is seeing many innovative fintechs looking to solve the challenge of increasing financial inclusion and accessibility, with a particular focus on how to make mobile banking and payments simple and seamless.
Cashless transactions in the country increased by 75.2 per cent in the first nine months of 2020, compared to the same period the year before, and online shopping grew exponentially, ranking third in Southeast Asia in terms of visits to online shopping apps in the second quarter of 2020.
However, it appears that banks and traditional financial institutions are still failing to proactively help close the gaps on financial awareness and accessibility for consumers.
Banks need to step up to meet customer expectations
There is a clear need for better awareness and education around financial services, and banks need to step into this role in order to serve their customers’ needs.
Currently many consumers (57% of banked and 36% of unbanked) are relying on the internet and/or online searches, rather than their banks, to find more financial information and to learn about their access to the right financial products.
However, 56% of respondents believed that financial institutions should be responsible for educating consumers about their finances.
Key findings of the Mambu survey:
- More than half of unbanked customers (65%) were less than pleased with their financial situation.
- In the banked community, one in four (25%) are not happy with their current level of understanding about their finances and options available to them.
- In the median and above wage brackets (equalling US$63,000 and above per annum), nearly half (48%) stated they didn’t know how to open a bank account
- 28% of respondents stated they think banks should make it easier to understand how to open an account
- 26% of unbanked respondents believed that financial institutions could help them get a bank account by providing more personalised financial advisory services
- 40% of unbanked consumers stated providing more specialised and mobile/web-based services would help them become banked.
This is the second study of Mambu’s recently launched research series, Disruption Diaries.
The series seeks to understand what customers think of the key trends driving the development of the financial services industry, in an effort to identify opportunities for banks and others.
The full report on financial accessibility can be found here.
Featured image: Unsplash