ATLANTA — LexisNexis® Risk Solutions revealed the results of its 2022 Financial Transparency and Inclusion Report. The survey of banks, insurers and non-bank financial institutions in 13 countries and regions aims to better understand financial institutions’ commitment to financial transparency and financial inclusion and the challenges they face in achieving these twin goals.
Financial inclusion is a global issue. According to The World Bank, there are 1.4 billion unbanked individuals globally and the financial services industry faces challenges decreasing this number. There are many factors affecting financial inclusion: Poverty, a thin credit file, living in a cash-based society, history of bad debt and/or a lack of financial education can all impede access to financial services.
One way to convert the unbanked to a banked customer is to improve financial transparency. Financial institutions need the ability to identify consumers and understand their risk profiles, both to maintain regulatory compliance and support extending financial services to consumers. The more institutions understand about consumers, the easier it is to offer appropriate financial services. However, 69% of respondents agree that the unbanked or underbanked are harder to onboard than other types of customers and businesses due to lack of data.
The report reveals that financial institutions can do more to achieve greater transparency, indicated by the 64% of respondents who say identity verification is a challenge when onboarding individuals.
Key Findings from the Report:
“Financial institutions have clear responsibilities to verify customer identities and ensure compliance with national and international regulation,” said Leslie Bailey, vice president, financial crime compliance, LexisNexis Risk Solutions. “Rejecting potential customers due to inefficient or manual processes rather than regulatory reasons can be detrimental to genuine individuals trying to access financial services. With robust data and the right technology and processes in place, institutions can help improve global rates of financial inclusion without compromising on compliance.”2022 Financial Transparency and Inclusion Report
LexisNexis Risk Solutions and research and advisory firm Celent designed the Financial Transparency and Inclusion Survey. Celent provided analysis around the results. The online survey was conducted in late 2021 and received 297 completed responses globally from c-suite and other senior leaders with responsibility for compliance, retail and commercial areas.
Download a copy of the 2022 Financial Transparency and Inclusion Report.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions includes seven brands that span multiple industries and sectors. We harness the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.