Benefits of Digital-Only Financial Inclusion

Abstract

Many countries are using digital tools and technologies to advance financial inclusion to improve the well-being of households and communities. There is growing interest in using only digital tools to advance financial inclusion. A term used to describe this is digital-only financial inclusion. This chapter identifies the benefits of digital-only financial inclusion. The benefits include convenience, ensuring digital access to additional financial services, generating useful data to improve customers' welfare, increased safety, enabling the democratisation of financial services, improving social welfare and economic growth, reaching the poorest in remote areas, and increasing digital literacy. Policymakers and financial sector agents who are promoting, or attempting to adopt, digital-only financial inclusion strategies should be aware of the benefits while being mindful of the associated risks.