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Digitalisation helps values-based banks to address financial exclusion and improve their communities

by LLT Editor
26th Jan 22 1:04 pm

According to a recent survey by the Global Alliance for Banking on Values (GABV) among its member banks’ CEOs, values-based banks are moving from basic digital services to more sophisticated digital offerings, in part due to the pandemic. The main drivers for digitalisation are customer convenience, ability to scale up and operational efficiency. The survey was held in the last quarter of 2021 among the CEOs of the 66 member banks, with 52 CEOs responding.

Values-based banks are independent financial organisations that use money to deliver positive social and environmental impact. They are private banks, credit cooperatives, microfinance institutions, credit unions, and community banks, serving more than 60 million customers in 44 countries and holding over USD 200 billion. Digitalisation allows them to be closer to their customers and meet their needs, one of the key principles of these types of banks.

There is a high penetration of basic digital products and services among values-based banks. Internet banking, credit or debit cards, and mobile wallets are the primary three services and solutions in play among the banks. A 50% have implemented digital customer onboarding, and 33% have implemented digital loan processing.

The main products and services they expect to focus on in the future are related to loans and investments: including digital loan applications, digital loan processing and approval, and digital investment apps. Nevertheless, there are differences in the priorities between regions. For African members, for example, the priority in the coming months is electronic banking, while in the Asia-Pacific region, the focus is to implement digital onboarding of their clients. European and Latin American banks highlight the need to introduce digital loan applications and processing, while North American banks are focusing on data mining and digital loan processing.

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