In recent years, technology has transformed the way we engage with money. From the emergence of online banking to contactless payments, we’ve come a long way from the days of old where cash was the prominent transaction method. In doing so, technology has become an increasingly powerful enabler of financial inclusion, particularly in developing countries where access to traditional financial services remains limited for vast populations. By leveraging open data, behavioural analysis, geolocation capabilities, and innovative fintech solutions, technology is reshaping the financial landscape and empowering individuals and businesses to participate more fully in the global economy. Where transactions across borders would previously take days to complete at high cost and risk, this is now far more achievable, opening possibilities for developing countries to trade with more established nations.
How open data has paved the way for financial accessibility
Access to transactional and behavioural data has revolutionised financial services, particularly for individuals who lack traditional credit histories or banking relationships. In developing countries, where many people operate outside formal financial systems, transactional data—such as transaction amounts, dates, times, and locations—offers valuable insights into spending patterns and income stability. For example, by analysing these data points, banks and fintech companies can offer microloans to small and medium enterprises (SMEs) or individuals who don’t have savings accounts. This transactional data functions as an alternative credit score, enabling lenders to assess creditworthiness even for those who have never taken out a formal loan. For the merchants themselves this is a transformational development as it allows them to commit greater investment to grow their businesses.
Behavioural data can also improve financial literacy and encourage healthier financial habits. By tracking spending and interaction patterns, fintech companies can develop features like saving nudges or spending alerts, helping users manage their finances more responsibly. This type of data is also instrumental in detecting fraud: if an elderly person’s account shows unusual spending—such as a large withdrawal at a casino—technology can quickly flag this as suspicious, adding an extra layer of security. Cash, on the other hand, was far harder to track, manage and keep secure.
Tailored financial products for the gig economy
The rise of the gig economy, particularly in urban areas of developing countries, has created a need for flexible financial products tailored to the needs of gig workers. For instance, geolocation and mobility data provide insights into how ride-share operators or delivery drivers earn and work, enabling insurers and fintech providers to create “pay-as-you-go” insurance policies. These policies adjust coverage based on factors like work hours, location, and mileage, making insurance more affordable and accessible to workers who operate outside traditional employment structures.
This targeted use of data addresses a critical gap in financial services for gig workers, who often lack access to health or job security benefits. By adapting financial products to these workers’ unique needs, technology is enabling them to access services that were previously unaffordable or simply unavailable.
The power of digital wallets in Africa
In many parts of Africa, limited access to physical banks has hindered financial inclusion. Telecommunications companies (telcos), however, have found a solution by creating digital wallets linked to mobile phones. By leveraging mobile phone data, telcos have enabled users to conduct a variety of financial transactions without needing a bank account. These digital wallets allow users to convert phone minutes into money, which they can then send to others or use to pay for goods and services.
This innovation goes beyond simple transactions; telcos are even issuing loans based on users’ mobile data, such as their usage and payment history. These services provide individuals with essential financial resources, allowing them to build credit and access capital in ways previously unimaginable.
Cross-border payments and digital remittances are overcoming financial barriers
For many expatriates in developed countries, sending money to family members in developing nations remains a costly and complicated process. Traditional banking methods involve high fees, unfavourable conversion rates, and lengthy processing times. Digital remittances, however, have transformed this process by offering faster and more affordable alternatives.
For example, during the COVID-19 lockdown, many expatriates, including myself, were able to send money home using digital remittance platforms, bypassing the high fees and delays associated with traditional banks. For many people, these solutions provided a lifeline, ensuring that families in developing countries could receive essential support in a timely manner. Additionally, digital wallets and blockchain-based systems have enabled seamless transactions for many users, allowing them to circumvent broken financial systems and navigate restrictions such as capital controls.
Blockchain and cryptocurrency: A borderless solution for financial inclusion
Blockchain and cryptocurrency offer alternatives for individuals who experience delays with traditional banking transfers. While essential Anti-Money Laundering (AML) and fraud prevention measures protect the financial system, they can lead to extended processing times for remittances. For instance, a friend whose parents live in Nigeria faced recurring delays due to standard AML verifications when sending money from the UK. By using digital wallets and cryptocurrency platforms, which have built-in regulatory compliance and advanced fraud detection systems, he could complete the necessary checks more efficiently, ensuring his parents received funds promptly and securely while adhering to all applicable regulations.
Cryptocurrency and blockchain technology are also opening new avenues for financial inclusion in regions where traditional banking infrastructure is limited. By enabling peer-to-peer transactions without intermediaries, these technologies provide users with more control and flexibility, a game-changer for communities excluded from the formal financial sector.
Technology is a catalyst for ongoing inclusive growth
Technology’s role in driving financial inclusion is more than just a trend; it’s a transformative force empowering people and small businesses in developing countries to access essential financial services. Through open data, behavioural analysis, geolocation, digital wallets, and blockchain, technology is breaking down traditional barriers to financial services, fostering greater economic inclusion and resilience. As these innovations continue to evolve, they will undoubtedly play an even more vital role in creating a more inclusive global financial ecosystem—one where opportunity and financial security are within reach for everyone. The way that money moves around the world, both at a local and global scale has come a long way in recent years, but there’s still much more that can be achieved and technology will play a pivotal role.
Hiba Chamas
Hiba Chamas is Business Development Director at RTGS.global, a solution built to deliver an interbank settlement service for financial institutions. Enabling instant cross-border movement of funds, RTGS removes the need for multiple intermediaries with Payment-vs-Payment settlement – cutting transaction time and fees.
