China’s banks stand to earn US$63b in revenue by 2020 from financial inclusion, says EY
Banks in the mainland stand to benefit most from ‘financial inclusion’, which represents potential global revenue of US$200b across 60 countries
China’s banks could lose up to US$63.4 billion in revenues by 2020 if they did not make good use of fintech to serve the traditionally unbanked and underbanked customers, including financially excluded consumers and small and medium-sized firms, EY warned on Friday.
Globally, banks, it said, had yet to maximise the growth opportunities from so-called financial inclusion, which represented potential revenue bookings of US$200 billion across 60 countries.
In Asia-Pacific, that boost to bank revenue is estimated at US$88 billion, with China leading the pack, followed by Thailand at US$8.5 billion, and Vietnam at US$5 billion.
“Financial inclusion isn’t merely a corporate responsibility goal, it’s a strategic growth opportunity for financial institutions across emerging markets in Asia-Pacific,” said Jan Bellens, head of global emerging markets at EY.
“If banks do not capture this profitable growth opportunity, the gap will be filled by innovative non-bank institutions.”
About two billion people around the world have no access to financial services and more than 50 per cent of the adults in the poorest households are unbanked, according to the World Bank, which sees financial inclusion as an enabler to reduce poverty and boost prosperity.
More than 200 million micro, small and medium enterprises in emerging markets, or more than half of the global pool, have no access to banking services. A large concentration of them are in five markets – China, Brazil, India, Columbia and Thailand.