Banks can earn surplus annual revenues of $380bn through targeting micro-enterprises, and including unbanked and underbanked adults into the formal financial system, according to a report released jointly by Accenture, through Accenture Development Partnerships, and CARE International UK.
According to the report, titled "Within Reach", closing the small-business credit gap at average lending spreads as well as adding fee-based services could produce surplus revenue of nearly $270bn for banks.
At the same time, incorporating unbanked adults into the formal financial system could lead to another $110bn in additional revenue.
Among the banks surveyed in the report, 77% said that they were focused on short-term profit-driven commercial opportunities in a piecemeal manner, or were driven by philanthropic ambitions, the corporate social responsibility agenda or regulatory pressures.
On the other hand, only 23% of the respondents said that they had financial inclusion as part of a coherent corporate strategy resulting in long-term, sustainable investment plans to develop inclusive business models.
Accenture Financial Services Operating Group senior managing director Simon Whitehouse said: "The traditional view has been that banking the unbanked and underbanked tended to be low-end, unprofitable and philanthropic. But new business models, enabled by digital technologies, are helping banks write a new rulebook for what is possible."
In order to facilitate financial inclusion, the report therefore, recommends banks to simplify existing products, use digital-enabling solutions, partner with alternative providers and the development sector, as well as leverage digital to boost efficiencies.
Accenture Development Partnerships’ Louise James added: "It is clear that many banks recognize the opportunity of greater financial inclusion, but are struggling to make progress. This is where cross sector collaboration can play a critical role – by bringing together a range of relevant parties who can help financial institutions build their understanding of the customer needs. These partnerships, while helping banks realize commercial benefits, also ensure that new customers are integrated in a way that underpins wider social development and long term involvement in local commerce."