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Digital solutions for access to financial services in a ‘less cash’ world

The IFoA’s Cashless Society Working Party’s (CSWP) analysis suggests that as the use of cash in our society decreases, it poses a risk to financial inclusion and threatens to widen inequalities rather than reduce them

UN Sustainable Development Goal (SDG) ‘Reduced inequalities’ includes targets and indicators to reduce economic inequalities, both within and between countries by 2030. One of the targets is ‘to empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other statuses’. The IFoA’s Cashless Society Working Party’s (CSWP) analysis suggests that as the use of cash in our society decreases, it poses a risk to financial inclusion and threatens to widen inequalities rather than reduce them. Therefore, ensuring that individuals and businesses have access to useful and affordable financial products and services that meet their needs as we make this transition to a less-cash society will be essential to promoting progress against SDG 10.  

A Cashless Society?

MoneyIn 2008, six out of every ten transactions were cash. By 2018 it had reduced to three in ten; and the 2018 UK Payment Market Report suggests it could be as low as one in ten within the next fifteen years.

The ‘Access to Cash Review’ (the Review), published in March 2019, found that failing to manage the transition to a less-cash society would create significant risks for individuals and society. The review identified risks such as the loss of personal independence and increased risk of financial abuse and debt, as well as identifying that rural communities were particularly at risk. As well as those living in rural areas, according to the Review over 8 million adults in the UK would struggle to cope in a cashless society. Many of these people are vulnerable in one or more ways, for example living in poverty, or with physical or mental health issues.

The IFoA’s CSWP is calling for the active management of this transition. It is particularly concerned about how a lack of planning could negatively impact financial inclusion. The CSWP states that as cash reduces, a digitally-based financial inclusion program will be vital to ensure that no one is left behind. This program should include improving access to digital financial services for these groups so that they can manage their money online, including through the use of mobile money. Further elements of a digitally-based financial inclusion program proposed by the CSWP are discussed on the coping in a cashless society news page.

There are international examples of increased digitalisation revolutionising financial inclusion. The following case study explores how the mobile based financial service M-Pesa has extended access to financial services and products to previously excluded segments of the population in Kenya.

The growth of mobile money in Africa

Traditional banking services, including ATMs and commercial banking branches, are not widely accessible to all in sub-Saharan Africa. Previously, this left a large proportion of the population, particularly those who fall into the low and middle income category, without access to the formal economy. It also exposed society to crimes which are more likely to occur within a largely cash-based society including tax evasion and money laundering. However, the availability of mobile phones has enabled widespread adoption of mobile money services, such as M-PESA, and has gone some way in addressing these issues.

M-Pesa, the first mobile money service in Africa, was launched in 2007 by Kenya’s largest mobile network operator, Safaricom. For a small fee, the service allows users to send money, from an account stored on their phone, to others and to pay for bills such as rent or utilities. Users can also exchange cash for virtual currency or vice versa at participating agents, such as Safaricom outlets, petrol stations, supermarkets and selected banks and micro-finance institutions.

Since its launch, mobile money has seen significant growth in the region. As of December 2018, mobile money registered accounts in sub-Saharan Africa had reached nearly 400 million (GSM Association, 2019). In 2018, users of these accounts performed 1.7bn transactions, worth $US 26.8bn in value. Accessibility of mobile money agents has played a key role in driving customer adoption. According to the International Monetary Fund (2018), there are 1.4 million active mobile money agents in the region. This is significantly more than the 19k bank branches.

The use of mobile money has deepened financial inclusion and has benefited large proportions of the population that are still unable to access traditional banking services including those on a lower income, young adults and women. Research has found that by using the service women are able to improve their ability to save (Jack, 2016). It is estimated that this ability has lifted 2% of Kenyan households out of poverty. It has also been found that, since its launch, mobile money has increased access to essential government services in Kenya from 20% to 90% (GSM Association, 2017). This promotes further progress across a range of the SDGs including goal 1 – no poverty and goal 5 – gender equality.

The growth of M-PESA has extended beyond Africa and it now has 30 million users in 10 countries. M-Pesa services are now offered in Albania, D.R. Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania, and Tanzania. Mobile money has proven itself to be a useful tool in developing countries for promoting financial inclusion and, ultimately, sustainable development.

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  • SIAS Event: CMI Update

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    1 April 2020

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    We are sorry. This event has now been cancelled.

    Following the release of the updated CMI Mortality Projection Model, CMI_2019, the CMI Mortality Projections Committee will lead a discussion on future mortality improvements.

  • Spaces available

    In the webinar, Stuart Hitchcock, Head of Portfolio Management for Private Credit, within LGIM Real Assets, will provide some insight into the nature of the private credit markets. Discussion will evolve around development of the markets and lending landscape, key investment characteristics including structural and legal protections, public vs private investments, advantages and drawbacks for borrowers, and attractiveness for investors.

    The webinar will also focus on describing the investment process such as origination through execution, credit, structure, pricing, on-going asset management, portfolio construction within private markets.

  • Current Issues in General Insurance (CIGI) 2020

    Hilton London Tower Bridge, 5 More London Riverside, Tooley St, London SE1 2BY
    22 April 2020

    Spaces available

    CIGI is a well-established one-day seminar designed to increase awareness and encourage discussion on a variety of topical issues across the general insurance industry. 

    There will be an excellent and diverse line-up of speakers to provide a variety of perspectives and challenge covering technical and professional areas. 

  • Professional Skills Training - Edinburgh (29 April 2020)

    IFoA (Edinburgh), Level 2, Exchange Crescent 7 Conference Square Edinburgh EH3 8RA
    29 April 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Professional Skills Training - London (29 April 2020)

    Staple Inn, High Holborn, London WC1V 7QJ         
    29 April 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • CANCELLED The Global Actuarial Profession

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    30 April 2020

    Spaces available

    We are sorry that this event has been cancelled.

    The IFoA's policy regarding COVID-19 is designed to safeguard the well-being of members and employees. As stated within the policy, the IFoA is reviewing its events programme on a case-by-case basis.

  • SIAS Event: Cyber Insurance

    Staple Inn Hall, High Holborn, London, WC1V 7QJ
    4 May 2020

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    The talk will cover:
    • Why cyber security is regarded as the top threat to businesses (Allianz Risk Barometer 2019)
    • What is causing the shift in threat landscape
    • Who is attacking, why, and how we can stop them
    • Customer impressions of cyber security and how you can help them
    • Threats to evaluating insurable losses and responding to claims
    • How cyber insurance policies have evolved, and need to continue to do so
    • Can and should you recover ransoms under cyber insurance?
    • What is the future for cyber risk?

  • KSS event: Technology: A red-eyed Terminator or an actuary’s best friend?

     Hymans Robertson, Exchange Place 1, 1 Semple Street, Edinburgh, EH3 8BL
    4 May 2020

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    Despite long-running concerns that innovation could lead to widespread redundancy, technology has enabled greater productivity, created higher-value jobs and spurred us on to new heights. With artificial intelligence increasingly automating work undertaken by professionals, I look at the prospects for the actuarial profession in the era of unprecedented technological innovation.

  • Finance and Investment Conference 2020

    Royal College of Physicians, 11 St Andrews Pl, London NW1 4LE
    05-05 May 2020
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    Join us at this year’s Finance and Investment Conference in London that will focus on ESG. The environmental, social and governance (ESG) space is growing rapidly and increasingly moving centre stage. In many cases, it is now an essential part of policy and central to the way stakeholders make decisions for the long term to ensure retention of clients, manage risk better, and ensure more economically efficient and sustainable investment returns.

    ESG factors cover a wide range of areas reflecting how vital consideration of these factors are part of wider systemic risks.

    The IFoA’s policy regarding Coronavirus is designed to safeguard the well being of those who attend IFoA events. Find out more. 

    If you have further questions specifically about this event please contact the IFoA Events Team on eventmanagament@actuaires.org.uk

  • Professional Skills Training - Edinburgh (19 May 2020)

    IFoA (Edinburgh), Level 2, Exchange Crescent 7 Conference Square Edinburgh EH3 8RA
    19 May 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Professional Skills Training - London (19 May 2020)

    Staple Inn, High Holborn, London WC1V 7QJ         
    19 May 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • CILA 2020

    Royal College of Physicians, 11 St Andrews Pl, London NW1 4LE
    20 May 2020

    Spaces available

    CILA is aimed at practicing life actuaries from life offices, consulting firms and other employers of actuaries. It will also be of interest to all those who work in, or advise on, the life assurance market in the UK and Europe. The programme this year features a timely mix of hot topics including sessions on:

  • Protection, Health and Care Conference 2020

    The Grand Brighton, 97-99 Kings Rd, Brighton BN1 2FW
    02-03 June 2020
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    The Protection, Health and Care Conference is an annual conference aimed at all insurance professionals with a passion for harnessing insurance risk in their organisations.

  • Spaces available

    How we relate to others at work, whether they are colleagues, clients, prospective clients or other business contacts is key to individual career progression and business performance. People buy people , so considering what we are known for and how to be positively memorable are vital. This session looks at the importance of professional relationships, the psychology of personal image and impact and the three personal impact 'tools' which affect what people say about us when we're not in the room.

  • Mortality and Longevity 2020

    1 Birdcage Walk, Westminster, London SW1H 9JJ
    08-08 June 2020
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    This highly regarded seminar will provide topical and practical updates and discussion on the latest thinking and innovations in mortality and longevity.  The program is designed for life, pensions and health and care actuaries, academics, researchers, underwriters and related practitioners eager to learn about the latest developments in mortality and longevity.  The sessions are designed to be very accessible to a broad range of exp

  • Professional Skills Training - London (10 June 2020)

    Staple Inn, High Holborn, London WC1V 7QJ       
    10 June 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Professional Skills Training - Edinburgh (17 June 2020)

    IFoA (Edinburgh), Level 2, Exchange Crescent 7 Conference Square Edinburgh EH3 8RA
    17 June 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Professional Skills Training - London (18 June 2020)

    Staple Inn, High Holborn, London WC1V 7QJ   
    18 June 2020

    Spaces available

    A Trusted Profession

    A 2 hour CPD event designed to meet the IFoA’s Stage 3 Professional Skills Training under the IFoA’s CPD Scheme 2019/2020This session is suitable for actuaries working in any area (i.e. it is not specifically aimed at Pensions, GI or any other technical discipline) and is interactive, so you should come along prepared to take part in the discussions.

  • Pensions Conference 2020

    Renaissance Manchester City Centre Hotel, Blackfriars Street, Manchester,M3 2EQ
    18-19 June 2020
    Spaces available

    Join us as this year’s conference that will focus on topics including  funding and savings, pension law current issues, ESG, the end game and transferring risk, investment issues, data visualisation and data science.

  • IFoA Asia Conference 2020, Kuala Lumpur

    CCEC Nexus, 7, Jalan Kerinchi, Bangsar South, 59200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur, Malaysia
    24-25 June 2020
    Spaces available

    This event has been postponed. A new date will be announced.

    The IFoA's policy regarding COVID-19 is designed to safeguard the well-being of members and employees. As stated within the policy, the IFoA is reviewing its events programme on a case-by-case basis.

    To this end the IFoA and their strategic partner, the AIR, have taken the decision to postpone this year's Asia Conference. A new date will be announced pending further reviews over the following months.