Improved Global Financial Inclusion Despite Continued Economic Volatility
According to the Global Financial Inclusion Index from Principal®, global financial inclusion has shown improvement, driven by Southeast Asia and Latin America, while older global economies have experienced declining or stagnant financial inclusion. Singapore retains its position as the world's most financially inclusive market, followed by Hong Kong, Switzerland, the United States, and Sweden. However, fewer Americans report feeling financially included. The research conducted by the Centre for Economics and Business Research (Cebr) and Principal® evaluates the level of financial inclusion across 42 markets, considering government support, financial system support, and employer support. The report highlights the progress made in Southeast Asia and Latin America, the correlation between financial inclusion and social-economic development, and the challenges faced by developed economies.
Key Findings and Rankings
The overall global financial inclusion score has increased by 5.6 points, reaching 47.3 out of 100. Singapore ranks first in financial inclusion, excelling in government, employer, and financial system support. Markets with developing technology-enabled financial systems, such as Brazil, Thailand, Vietnam, and South Korea, have shown rapid progress in financial inclusion. The report also emphasizes the positive correlation between financial inclusion and other metrics of social and economic development. However, the largest economies generally show stagnation or deterioration in financial inclusion, with medium scores in government and financial system support and low scores in employer support.
US Findings and Rankings
Financial inclusion in the United States has slightly decreased, with a drop from the second to the fourth position in the Index. The decline is attributed to decreases in employer and government support. The U.S. consumer sentiment data reveals an increase in the number of people feeling financially excluded, particularly in the government pillar. While the U.S. maintains its top ranking in financial system support, there are concerns about the decline in employer support, especially among smaller businesses.
In conclusion, the Global Financial Inclusion Index highlights the progress and challenges in achieving financial inclusion across global markets. The report emphasizes the importance of government, financial system, and employer support in promoting financial inclusion. The findings provide valuable insights for policymakers, businesses, and organizations working towards enhancing financial inclusion and improving economic well-being.
Hot Take: Impact of Global Financial Inclusion Trends on New Businesses
The findings from the Global Financial Inclusion Index offer a revealing look at the global financial landscape, with implications for new businesses. The rise in financial inclusion in Southeast Asia and Latin America could present new markets and opportunities for businesses. However, the stagnation or deterioration in financial inclusion in larger economies, such as the U.S., could pose challenges.
Emerging Markets and Opportunities
The rapid progress in financial inclusion in markets with developing technology-enabled financial systems, like Brazil, Thailand, Vietnam, and South Korea, could open up new customer bases and avenues for growth for businesses. The correlation between financial inclusion and social-economic development suggests that these markets could offer a conducive environment for business expansion.
Challenges in Developed Economies
Conversely, the decline in financial inclusion in the U.S., particularly in employer and government support, could present hurdles for new businesses. The increase in the number of people feeling financially excluded could impact consumer behavior and spending, affecting businesses' bottom lines.
In conclusion, while the improving global financial inclusion presents opportunities, businesses must also navigate the challenges in more developed economies. Understanding these trends and adapting business strategies accordingly could be key to success in the evolving global financial landscape.