The financial services sector must work harder to embrace the unbanked, a senior executive from the digital banking sector has urged.

“Financial exclusion is a huge problem,” claimed Rushd Averroes, CEO and founder of digital challenger BABB. “There are almost 1.6 million people unbanked in the UK alone. The reasons for this financial exclusion are varied but largely stem from the systemic social issues in this country – the homeless, unemployed and refugees all make up a large proportion of the unbanked population for whom the lives are primarily cash based, along with non-EU students coming to study in the UK.”

Ultimately, he said, it’s not in banks interests to include the unbanked: “To them, the unbanked are inefficient and expensive to on-board, considering the small balances they may have,” added Averroes. “That makes them unprofitable to traditional banks. Costs must be reduced from the ground up to include these people in the financial system. That is what we are doing with BABB. The cashless society is only growing and for the unbanked this is very troubling and concerning. However, new innovations in fintech’s like blockchain and biometrics have only made it easier to integrate the unbanked into the cashless society.”

Averroes said many start-up fintechs have tried to help the unbanked, underbanked or underserved: “For the most part, they’ve attempted this using existing structures, templates, infrastructure and technologies,” he concluded. “The progress made so far, by the fintech industry and financial inclusion initiatives, has been promising but limited. At BABB we’re are taking a radically different approach to accelerate change. Banking is a basic need that there will always be a demand for – it’s simply a question of lowering the access barriers to people who have been previously excluded. We will provide affordable, convenient and accessible banking services which offer connectivity to friends and family while integrating with legacy systems already in use, such as SWIFT. Many unbanked people are under the impression that they can’t afford to have a bank account – we’re fixing this problem.”

by Guy Matthews