At Asobancaria’s Annual Banking Conference in Colombia, Ann Cairns, President of International Markets for MasterCard, presented the main challenges when it comes to financial inclusion.
Banking inclusion, the use of electronic payments and generating an extensive financial ecosystem are fundamental elements to promote the country’s economic growth and development.
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Bogota, 27 August, 2014 – During last week’s Asobancaria’s Annual Banking conference in Colombia, Ann Cairns, President of International Markets for MasterCard, stated that Colombia needs to drive financial inclusion as a social strategy to empower Colombians and improve their quality of life. According to the executive, over 2.5 billion people, roughly half of the world’s adult population, are unbanked or excluded from the financial system.
“By being excluded from the financial system, these people are left without the basic things that most of us take for granted – an identity, a way to save money for a rainy day, a loan, or work insurance,” explained Ann Cairns during the session titled “Financial Inclusion, Education and Satisfaction of the Financial Consumer”, at Asobancaria’s yearly conference in Cartagena, Colombia. The session also included a panel with Colombia’s Minister of Finance, Mauricio Cárdenas, and the presidents of Colombia’s main banks, and closing remarks by Colombian Vice-president German Vargas Lleras.
At its core, financial inclusion means having access to a secure account that allows users to store and use money. The percentage of Colombian adults that have at least one financial product is 69.2%. However, most of them tend to be products intended to withdraw cash from baking institutions or ATMs. This situation greatly contributes to the fact that 90% of payments in Colombia are still made in cash.
Promoting a transition towards a cashless society is one of the country’s great banking challenges. The use of electronic payment solutions is a process that will allow consumers to access greater financial inclusion. This inclusion not only promotes growth and equality, but also facilitates the distribution of aid transferred to citizens by the Government, considerably reduces the cost of transactions, and makes the economy more efficient, safer and transparent.
Generally speaking, the use of cash promotes informality and thus illegality, given that unregistered transactions cannot be tracked. The use of cash, just including direct costs such as issuance and safeguarding of bills, can have a value of close to 2% of the countries’ GDPs, according to MasterCard figures.
In Colombia, the challenge is to join efforts between the public and private sectors to promote the use of electronic payment methods. This is the path that leads to more people overcoming poverty and less fortunate citizens having tools to manage their money and optimize their resources, thus improving their quality of life.
MasterCard (NYSE: MA), www.mastercard.com,is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardES, @MasterCardEU, @MasterCardNews,orjoin the discussion on the Cashless Pioneers Blog and subscribe for the latest news on the Engagement Bureau.
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