Finastra EVP: Technology Driving Financial Inclusion

Despite significant progress in global financial services, major challenges persist in creating truly inclusive financial systems. Here, we speak to Siobhan Byron, EVP, Universal Banking at Finastra, about ways financial institutions can build a more inclusive, resilient and sustainable global financial system.

“We still have large unbanked or underbanked populations around the world. Black swan events, including extreme weather, have become more frequent,” notes Siobhan.

Siobhan adds that “institutions face increasing pressures to reduce their environmental footprint while helping their customers do the same.” She believes that tackling these challenges requires an open ecosystem approach.

“A good example is Finastra Essence, our next-gen, digital, core banking platform, which combines rich, broad, and deep banking functionality with advanced technology, and supports seamless integrations with the ever-growing fintech ecosystem through open APIs,” Siobhan explains.

This holistic approach is helping institutions to equalise finance, enabling more people to access banking services regardless of economic status or unique needs that traditional banking hasn't addressed.

Siobhan emphasises that these technological advancements are creating new opportunities for financial innovation. “We empower visionary organisations with the ability to tap into new streams of revenue, fostering competition and creating more space for financial innovation,” she says.

The impact extends beyond just access, as Siobhan points out. “Our software drives inclusion by reducing bias and championing a more progressive, equitable and accessible banking sector – bridging the banking gap and reducing the numbers of unbanked and underbanked in our societies.”

Successful implementation of these inclusive approaches can be seen in institutions like Oro Bank in Bhutan and Tonik in the Philippines, which Siobhan identifies as “great examples of banks taking an innovative approach to financial inclusion”.

Financial institutions themselves increasingly recognise the importance of broadening access to financial services. 

"The responses demonstrate an ambition to deliver on a key part of their wider societal role, benefit consumers, and better meet customer expectations," Siobhan observes. Finastra's recent research underscores this shift in industry thinking.

“Our Financial Services State of the Nation Survey, which canvassed the opinions of more than 1,100 financial institutions globally, found that the vast majority view financial inclusion as a priority,” Siobhan reveals.

Financial inclusion benefits both consumers and institutions

The survey highlighted strong institutional commitment to financial inclusion, with significant implications for both consumers and the industry itself.

“Our research found that 87% of financial institutions clearly see themselves as having a duty to widen banking access to support communities and 85% as having a duty to improve financial literacy,” Siobhan says.

This demonstrates a commitment to delivering on financial institutions' wider societal role while simultaneously benefiting consumers and meeting evolving customer expectations.

The business case for financial inclusion is equally compelling. “Widening access to finance doesn't only benefit consumers. It also brings benefits for the industry, opening new routes to market and new sources of revenue for financial institutions,” Siobhan continues.

Survey respondents specifically noted how financial inclusion initiatives will expand institutional roles. “Some 53% of respondents noted that it will widen the role of banks or financial institutions to provide for unbanked and underbanked individuals,” Siobhan explains.

Additionally, 51% of surveyed institutions recognised that financial inclusion “will open up new avenues for specific or niche audiences, such as enabling gig workers to access tailored banking services”.

Emerging technologies accelerating financial inclusion

Technology partnerships are crucial for financial institutions looking to enhance their inclusive offerings.

“By tapping into ecosystems and securing the right partnerships, banks can seamlessly implement the latest technologies, launch new offerings and strengthen their products and services to deliver new offerings to market and quickly evolve with customer demands,” says Siobhan.

“Cloud-first solutions enable seamless ecosystem participation, while also strengthening agility and scalability for banks,” she continues.

Software-as-a-Service (SaaS) models complement cloud approaches by “bringing further benefits in these areas, while also reducing costs and time to market,” according to Siobhan.

Artificial intelligence, particularly Generative AI, is emerging as another powerful tool for financial inclusion. Siobhan notes that it's “showing enormous potential in several areas. For example, it's being used to better detect fraud, and it's also enabling banks to provide their customers with intuitive suggestions on how they can optimise their finances.”

These AI capabilities are creating unprecedented opportunities for personalised financial guidance. 

“Tapping into the data they hold and using technologies such as Gen AI, banks can implement 24/7 assistants that assess a person's financial situation and guide them towards the best savings, loans or investment products for them – supporting improved financial education and financial inclusion for all,” Siobhan concludes.

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