McKinsey Consulting: Use of new digital payment mechanisms will connect more people to banking system.

Economic work is undergoing transformation processes over time. These changes have been impacted greatly by technology. To understand this idea against this dimension must be taken into account where they are advancing towards major banks in relation to innovation that gives the customer. Currently and the possibility of creating a bank account from a mobile phone is handled even also in the very near future with digital currency accounts among which Bitcoin highlights.

Studies about issues of banking and technology allow hypothesizing about the behavior of financial activities in a period previously estimated. The McKinsey consulting firm is senior management that helps the world’s leading companies to improve their performance in various areas (from strategy to operations, through the organization or technology). This time has published a report stating that emerging markets can give a boost to their economies of 3.7 trillion over the next decade if embrace the full potential of digital finance, marks the site Milenio.

Mobile wallets, online payments, prepaid cards and digital savings accounts are examples of financial inexpensive services that McKinsey Global Institute estimates can add six percent of GDP (gross domestic product) from emerging markets by 2025, equivalent to the entire African economy.

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The report is based on field research in seven countries: Brazil, China, Ethiopia, India, Mexico, Nigeria and Pakistan. It was found that almost 80% of adults in emerging economies had mobile phones in 2014, but only 55% had a financial account. With the projection that the use of mobile reach more than 90% of adults in emerging markets by 2020, McKinsey said: “For most people in these countries, the story begins in the palm of their hand, with mobile phones.”

“This can provide easy access to digital wallets that can be used for all payment transactions such as receiving remittances, wages and government subsidies, shop in stores, pay utility bills or school fees.”

McKinsey estimates that digital finance can help connect 1600 million people in the financial system, more than half women, of the more than 2000 million unbanked. Women in emerging economies are 20% less likely to have a formal bank account that men, according to the information found.

The consultant adds that this change would generate $ 2.1 trillion of additional loans to individuals and small businesses. You can also attract 4.2 trillion of deposits to financial service providers which can be telecommunications or technology groups like banks.

The report also notes that the expansion of financial services on mobile devices have the potential to expand much faster than physical banking. It gives the example of mobile payment system M-Pesa in Kenya, which grew to 40% of adults who use it in the country in its first three years after its launch in 2007 and last year reached 70%.

The benefits of digital finances are not distributed equally to all emerging markets. Low-income countries such as Ethiopia, India and Nigeria have the greatest potential and can add 10 to 12% of GDP to accommodate digital finance. On the other hand, digital finance can add 4 to 5% to middle-income economies such as China and Brazil.

Source: Milenio

Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and/or services. This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest.

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