How innovative digital bank drives financial inclusion

South Africa has a degree of high financial inclusion, with over 80 percent of the population having access to formal financial services. However, similar to global trends, there are certain segments of the population who remain underserved by the financial services sector. 

These include women, rural people, the youth and low-income earners, among others. The achievement of financial inclusion relies on ensuring that the products and services available in the market are appropriate in meeting the needs of these groups.

Against this backdrop, Genesis partnered with a group of development organisations seeking to drive financial inclusion to conduct a case study of an innovative, digital South African challenger bank. 

The aim of the case study was twofold. The first objective was to understand the state of financial inclusion in South Africa, particularly from the perspectives of the above-mentioned groups. The second was to understand how the bank’s offerings promote financial inclusion among these groups.

Genesis used national-level financial inclusion data to assess financial inclusion in South Africa, taking into account access to account ownership, credit, savings and insurance, split according to the groups mentioned earlier. 

Following this, the team analysed the bank’s internal data to understand the make-up of its customer base and how this differs from what might be expected, based on the South African population. This included analysing the various groups' transactional and savings behaviour, and comparing them with the population as a whole and the rest of the customer base. 

Particular emphasis was placed on analysing the behaviour of what was called “the most underserved segment” - rural, low-income, young women. Finally, the Genesis team assessed how the bank's customer value proposition and service model enabled it to serve these underserved segments effectively.

Based on the findings of the analysis, Genesis showed how the bank was promoting financial inclusion in a manner consistent with key areas of impact. The findings from the research fed into the client’s financial inclusion research on digital banking, while also informing the bank’s strategic thinking.