Financial Inclusion Beyond Payments: Policy Considerations for Digital Savings

Across the developing world, financial institutions have leveraged digital technologies and innovative business models to expand access to digital financial services (DFS), such index.jpgas digital transaction accounts and payment services, which serve as the gateway to financial inclusion. Providers are now diversifying their products offerings to newer DFS, such as credit, insurance, and savings. A recent World Bank Group report examines DFS products geared toward longer-term savings. Financial Inclusion Beyond Payments: Policy Considerations for Digital Savings, looks at how these digital savings products—though not yet mature–have the potential to advance an important element of digital financial inclusion.

Access to reliable savings products at regulated financial institutions is important for helping low-income and financially underserved segments safely meet their long-term saving goals. Yet significant gaps exist in developing regions between the proportion of adults who save and those who save at a financial institution (figure 1). The gaps owe, in part, to limited access to savings products among low-income and rural populations, and to the perception among low-income individuals that their savings are not large enough to warrant a savings product at a financial institution, which may entail maintenance fees, minimum balance requirements, and high indirect access costs (e.g., transportation, time). Thus, accessible, flexible, and affordable digital savings products could bring existing informal saving into the regulated financial sector.

Figure 1. Saving patterns in developing regions (2017, excluding high-income countries)


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Source: Global Findex Database, World Bank.


The report analyzes digital savings product deployments and relevant DFS policy issues across Sub-Saharan Africa (SSA) and Asia. It focuses primarily on digital savings accounts or digitally-accessible, interest-bearing deposit accounts held by regulated deposit-taking institutions. Importantly, nonbank entities, such as nonbank e-money issuers (NBEIs), are often integral to digital savings account deployment models. Additionally, the report principally examines digital savings accounts that are accessible on basic mobile devices or agent-administered point-of-sale terminals.

How are digital savings accounts being deployed?

Among the 36 digital savings accounts examined in the report, three primary deployment models have taken shape (figure 2). Partnerships between banking institutions and NBEIs, such as mobile network operators (MNOs) and other fintech companies, are common in the provision of digital savings accounts. MNO partnerships account for a greater share of the digital savings account deployments in SSA than in Asia, which reflects the historically MNO-centric DFS approach in SSA and contrasting bank-oriented DFS patterns in a number of Asian countries.

Figure 2. Three common digital savings account delivery models


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Icon sources: Microsoft Office 365 ProPlus (subscription)


While many digital savings accounts constitute digital channels to legacy savings accounts at banking institutions, many others, such as M-Shwari in Kenya, M-Pawa in Tanzania, and MoKash in Uganda, are new accounts developed for digital savings. Moreover, new classes of institutions have emerged, such as India’s payments banks, which offer dedicated digital savings accounts. Though the report focuses on digital savings accounts, it also takes stock of alternative non-deposit digital savings products that enhance consumer choice, such as e-wallets offering customers a financial return and digitally-accessible pension products.

Digital technologies and innovation help enhance access to savings accounts

The report finds that digital technology and innovative business models enable three broad product and market properties that enhance savings account accessibility:

  • Value chain disaggregation, which occurs when banking institutions partner with nonbanks for the technology and distribution aspects of digital savings accounts, allows for expanded access points, improvements in the economics of low-cost savings accounts, leveraging of different entities’ comparative advantages, and scaling up of microbanking institutions.
  • Product tailoring and customization is made easier through digital technology and innovative business models, enabling providers to incorporate greater degrees of accessibility, flexibility, and affordability in their savings account offerings.
  • Leveraging of existing DFS ecosystems helps foster competition in the savings product space and facilitates access through use of existing infrastructure.

Policies and digital savings market development

Finally, the report discusses key policy issues that enable and constrain digital savings market development and offers policy considerations within the context of the G20’s High-Level Principles (HLPs) for Digital Financial Inclusion.

Based on current market observations, three policy considerations seem most important for facilitating digital savings account deployments:

  • Enable banking institutions to pursue digital savings partnerships with nonbank entities.
  • Support the development of interoperability between banks and nonbank e-money issuers.
  • Harmonize customer due diligence standards for e-money wallets and low-risk bank deposits.

Digital savings represents a relatively new area of inquiry for digital financial inclusion research. The report largely focuses on supply-side factors in the digital savings market. As products mature and more data become available, researchers will be able to evaluate questions that bring together supply and demand side factors, thus developing a clearer picture of what works best in the digital savings market. The report concludes with a series of future research questions meant to elucidate key outstanding issues. These focus on the digital savings product attributes that drive responsible uptake and usage, as well as product economics and competition. Policymakers should consider these future research topics in concert with the policy considerations discussed in the report.