The role of innovation in driving financial inclusion

Financial inclusion allows people to make decisions that are best for them. Yet, access to financial products and services that allow everyone, everywhere to transfer, save, and invest funds remain out of reach. While more individuals than ever have access to formal bank accounts, proximate innovation is key for closing the gaps that remain.

by Aditi Sethi, Economic Prosperity Community Lead, MIT Solve

Access to appropriate financial goods and services allows people to pursue opportunities and prepare for unexpected shocks. It also allows individuals to invest in themselves and their businesses and build intergenerational wealth. Having access to safe and secure financial services where one can safely store funds, transact securely, and access lines of credit and insurance creates a safety net which supports risk taking and keeps many out of the cycle of debt and poverty. Ultimately, with the right tools and services in place, financial inclusion can provide the scaffolding for equitable economic growth on an individual and community level.

The most recent World Bank Global Findex Database on access to financial services shows that approximately 1.4 billion adults still lack a formal bank account. An additional approximately 400,000 people lack access to appropriate services like the ability to transfer money safely. Thankfully, huge progress is also evident: mobile phone access has helped hundreds of thousands new people open accounts for the first time. The pandemic has also played a role in moving more people to open accounts so they can receive government assistance. In Southeast Asia, the pandemic has led to accelerated growth in the use of digital financial services such as e-commerce and mobile wallet usage.

Gaps in financial inclusion across gender, individuals and communities

  • Women continue to have lower access to financial products and services than men. Some of this inequality can be explained by the discrepancy in access to devices, though research also suggests that fintech design plays a large role in this difference.
  • Communities that have been historically discriminated against, including low-income populations, face higher costs in accessing financial services and products.
  • Disabled populations face discrimination through both prejudice and because products are not suitable for their use.
  • Displaced individuals, particularly those lacking a formal ID, have a great need for financial accounts where they can send and receive funds. However, they often do not have the relevant documents to prove their identity and feel unsafe in sharing their data to open these accounts.

The number of unbanked adults continues to be of concern, as does the “curse of the empty bank account”. This saying from Latin America refers to accounts that were opened to receive or make a payment and have since remained unused because account holders found no added value to having a formal account due to the lack of helpful financial products or services.

Proximate innovation is key for closing the gaps that remain

An effective way to close these gaps is for solutions to come from the communities where the gaps exist. Proximate innovators – the individuals and communities closest to the issue – are best situated to understand the challenge, barriers to its solutions, available resources, and potential hazards. They also have the knowledge to select technologies that will be most suitable and impactful.

Areas in which innovations can play a role in driving financial inclusion:

  • Transferring payments: making it easier, cheaper, and more secure to send and receive salaries, remittances, and other payments;
  • Assessing credit-worthiness: seek to end discrimination in issuing loans, create a more accurate assessment of someone’s assets, and establish varied sources to understand trust-worthiness. For example, during the pandemic, digital platform companies like Gojek and Grab used their merchant data to help pre-screen loan applicants for the dissemination of loan aid to MSMEs;
  • Creating or scaling safe personal ID methods: technological innovations can create new and safe methods in establishing one’s identity or reduce friction in scaling existing methods;
  • Informing the design of insurance products: innovations can aid in the gathering and synthesizing of relevant data, to allow for more deliberate and inclusive product design for uninsured populations who are at the greatest risk of facing shocks.

Solutions to financial exclusion must make financial products more accessible, affordable, and usable. They must be trustworthy and inclusive. The most effective solutions may include a literacy component that teaches people how to use the product.

We are at an exciting time, where innovations in technology can truly make it easier for everyone, everywhere, to be able to contribute and benefit from a larger economic system through financial inclusion.

MIT Solve, an initiative of the Massachusetts Institute of Technology (MIT), is seeking tech-based solutions that provide financially excluded individuals and small enterprises with the tools they need to withstand financial shocks and build wealth. With over $1 million available in prize funding, the 2023 Global Challenges aim to bring together MIT’s innovation ecosystem to drive lasting, transformational impact. For more information, click here.

The views and recommendations expressed in this article are solely of the author/s and do not necessarily reflect the views and position of the Tech for Good Institute.

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Mouna Aouri

Programme Fellow

Mouna Aouri is an Institute Fellow at the Tech For Good Institute. As a social entrepreneur, impact investor, and engineer, her experience spans over two decades in the MENA region, South East Asia, and Japan. She is founder of Woomentum, a Singapore-based platform dedicated to supporting women entrepreneurs in APAC through skill development and access to growth capital through strategic collaborations with corporate entities, investors and government partners.

Dr Ming Tan

Founding Executive Director

Dr Ming Tan is founding Executive Director for the Tech for Good Institute, a non-profit founded to catalyse research and collaboration on social, economic and policy trends accelerated by the digital economy in Southeast Asia. She is concurrently a Senior Fellow at the Centre for Governance and Sustainability at the National University of Singapore and Advisor to the Founder of the COMO Group, a Singaporean portfolio of lifestyle companies operating in 15 countries worldwide.  Her research interests lie at the intersection of technology, business and society, including sustainability and innovation.


Ming was previously Managing Director of IPOS International, part of the Intellectual Property Office of Singapore, which supports Singapore’s future growth as a global innovation hub for intellectual property creation, commercialisation and management. Prior to joining the public sector, she was Head of Stewardship of the COMO Group and the founding Executive Director of COMO Foundation, a grantmaker focused on gender equity that has served over 47 million women and girls since 2003.


As a company director, she lends brand and strategic guidance to several companies within the COMO Group. Ming also serves as a Council Member of the Council for Board Diversity, on the boards of COMO Foundation and Singapore Network Information Centre (SGNIC), and on the Digital and Technology Advisory Panel for Esplanade–Theatres on the Bay, Singapore’s national performing arts centre.


In the non-profit, educational and government spheres, Ming is a director of COMO Foundation and Singapore Network Information Centre (SGNIC) and chairs the Asia Advisory board for Swiss hospitality business and management school EHL. She also serves on  the Council for Board Diversity and the Digital and Technology Advisory Panel for Esplanade–Theatres on the Bay, Singapore’s national performing arts centre.


Ming was educated in Singapore, the United States, and England. She obtained her bachelor’s and master’s degrees from Stanford University and her doctorate from Oxford.