Bridging the Gap: How Fintech & Digital Banking are Transforming Global Financial Inclusion

The FinTech Weekly article “Banking on the Future: Emerging Improvements of Digital Banking and Financial Inclusivity” outlines three key dynamics shaping the future of financial services: the accelerating adoption of artificial intelligence (AI), the expansion of mobile money in regions with weak traditional banking infrastructure, and a shift among customers toward personalized, secure, user-centric digital banking experiences [6]. These trends align with broader data from the 2025 Global Findex report and other sector-surveys, underscoring both strong momentum and structural hurdles.

Scale and Reach of Financial Inclusion Advances
According to the 2025 Global Findex, about 79% of adults globally have formal financial accounts, up from 74% in 2021 [3]. In developing economies, formal saving also rose, with 40% of adults using financial accounts to save in 2024—a jump of 16 percentage points since 2021. Egypt’s financial inclusion rate surged to 76.3% by June 2025—up from 27.4% in 2016—underpinned by 114 million digital banking transactions worth EGP 11.7 trillion in 2024, strong SME credit growth, and expansive mobile wallet and instant payment services [4]. Meanwhile, India’s inclusion index stood at 67.0 in March 2025, with large enrolment numbers in the Jan Dhan initiative (57 crore people), a majority in rural/semi-urban areas and a meaningful female share [5]. These patterns corroborate that inclusion strategies combining infrastructure (digital IDs, mobile access), welfare transfers, and product innovation are working.

Fintechs, Underserved Segments, and Digital Banking Innovation
Fintech firms have moved from growth sprint into a more stable, sustainable phase, reporting robust revenue and profit increases (~40% each) and significantly serving underserved populations: MSMEs, low-income individuals, women [3]. AI plays a central role: 80-83% of fintechs report using AI for better customer experience, operational efficiency, and cost reduction [3]. Digital wallets, mobile money platforms, and agent networks are key tools in markets where internet penetration is lower or physical banking infrastructure sparse, especially in Africa and South Asia[5].

Persistent Challenges and Risks
Despite the gains, major gaps remain. Approximately 1.3 billion adults still lack financial accounts globally. The gender gap—while narrowed—persists: globally 77% of women have accounts versus 81% of men. Digital safety and resilience are weak: only about half of adults in low- and middle-income economies use device passwords; risks include fraud and cyber vulnerabilities. Connectivity constraints remain steep in many regions; high cost of mobile data and inaccessibility limit usage—especially among women or rural dwellers[7]. Also, regulatory, identity verification, and trust infrastructure vary widely by country, limiting scale and legitimacy.

Strategic Implications for Financial Institutions and Policymakers
Banks and fintechs need to consider inclusion not only in access but in usage: products must be designed for regular use, safe operations, and financial health. The rise of AI and data allows personalization, predictive tools, and better risk management, but demands strong governance and responsible AI frameworks to avoid biases. Partnerships between incumbents and fintechs are increasingly essential: incumbents provide trust, scale, regulatory compliance; fintechs bring agility and innovation. Policymakers must invest in digital infrastructure—connectivity, device affordability, digital ID systems—and in regulatory frameworks that protect privacy, ensure interoperability, and enable cross-sector trust. Finally, attention is needed for segments still left out: women, rural populations, residents without reliable connectivity, and those lacking legal identity or formal documentation.

Open Questions
– What are the most effective strategies to convert account ownership into active, beneficial usage—especially for savings, credit, and resilience tools?
– How can regulators balance innovation (e.g. AI, open banking, stablecoins) with security, privacy, and systemic risk concerns?
– What models of public-private partnership work best in low-income markets to ensure agent networks, last-mile delivery, and trust?
– How will infrastructure constraints (internet access, digital literacy, device cost) be sustainably addressed to avoid digital inclusion becoming a source of inequality?