Banking Becomes More Inclusive

Banking has become more inclusive in a measurable sense: more people can open and use accounts, receive payments electronically, move money without visiting a branch and access services that once depended on geography or personal relationships. The progress is substantial, but inclusion is not the same thing as universal access. A person can technically have a bank account and still find it too expensive, inconvenient or poorly suited to everyday needs.

The global trend is clear. The World Bank’s Global Findex 2025 reports that 79 percent of adults worldwide had an account at a financial institution or mobile-money provider in 2024, up sharply from 2011. Yet about 1.3 billion adults still lacked an account, showing that the remaining gap is large even after years of expansion.^[1] The useful question is therefore no longer simply whether banking reaches more people. It is whether financial services are affordable, usable, safe and capable of meeting the needs of people who have historically been excluded or underserved.

Financial inclusion is more than having a bank account

Access to banking services begins with the ability to open and maintain an account, but it does not end there. A basic transaction account can provide a secure place to receive wages or government payments, pay bills, use a debit card, transfer money and build a relationship with a regulated financial institution. Those functions matter because participation in a modern economy increasingly assumes that a person can send and receive money electronically.

Account ownership by itself is a weak measure if the account is rarely used or fails to replace more costly alternatives. Someone who keeps an account open only to cash a paycheck, but still relies on expensive nonbank services for most transactions, is not receiving the same practical benefit as someone who can use an affordable account for everyday payments and savings. Financial inclusion is better understood as meaningful access to services that actually improve the way people manage money.

That distinction also separates inclusion from simple digitization. Moving a banking service from a branch counter to a smartphone may make it cheaper and easier for many customers, but it can make the same service harder to use for someone without reliable internet access, an appropriate device, digital skills or confidence in online security. An inclusive banking system needs to reduce barriers without assuming that every customer faces the same barrier.

Access to banking has expanded, but exclusion remains

Developed banking markets already have high rates of account ownership, yet meaningful gaps remain within them. In the United States, the FDIC’s 2023 household survey found that 96 percent of households were banked, while 4.2 percent were unbanked. The same survey estimated that 14.2 percent of households were underbanked, meaning they had a bank or credit union account but primarily used nonbank products and services for important financial needs.^[2] Those figures show why a high headline account-ownership rate does not settle the inclusion question.

The reasons people remain outside mainstream banking are not all the same. Some households do not have enough money to meet minimum-balance expectations, some distrust banks, some are concerned about fees and some face identification or account-history problems. Others may have an account available but find that its design does not fit irregular income, small balances or the need to access every dollar quickly.

In lower-income and less-developed banking markets, the barriers can be broader. Physical distance from branches, limited financial infrastructure, high account costs, weak identification systems and a heavy reliance on cash can all reduce access. The expansion of mobile-money systems and digital accounts has allowed some countries to move around the traditional branch model, which is one reason global financial inclusion has increased even where conventional banking networks remain thin.

Why bank accounts still matter

The importance of a basic bank account is easy to underestimate because the account itself may look like a simple utility. Its value comes from the services connected to it. Wages can be deposited directly, bills can be paid without purchasing money orders, funds can be transferred to family members, purchases can be made without carrying cash and savings can be separated from day-to-day spending.

Direct deposit is a good example of how infrastructure can improve inclusion. Receiving wages electronically avoids the need to find somewhere to cash a paper check and can make funds available without a trip to a branch or check-cashing outlet. It can also reduce the risk and inconvenience associated with carrying a large amount of cash after payday. The benefit, however, depends on the recipient having an account that is affordable and easy to use, which is why digitizing payroll alone does not solve the broader problem.

Government payments can have a similar effect. When benefits, tax refunds or other public payments are delivered into transaction accounts, the payment itself can become a reason for someone to enter the formal financial system. Once the account exists, it may be used for other purposes, but that only becomes a lasting inclusion gain if the customer understands the product and can use it without recurring charges or operational problems that push them back toward cash.

Cost, trust and account design can still exclude people

For a household with a comfortable cash buffer, a modest monthly account fee may be an annoyance. For a household that frequently ends the month close to zero, the same fee can make the account unattractive or difficult to maintain. Minimum-balance rules, overdraft charges, out-of-network ATM fees and other costs can therefore have a much larger effect on low-balance customers than their nominal amount suggests.

Account design matters as much as headline pricing. An account with no monthly fee may still be poorly suited to a customer if it has limited access to cash, difficult deposit methods or features that expose the user to charges they do not understand. A genuinely inclusive account should be predictable enough that a customer can understand what it costs and practical enough that it can replace the alternative services the customer would otherwise use.

Trust creates another barrier. People who have experienced unexpected fees, account closures or difficulty resolving errors may be reluctant to return to mainstream banking even when a new product is cheaper. Banks do not solve that problem merely by offering an account. Clear disclosures, reliable service and fair error resolution are part of inclusion because a product that customers do not trust is unlikely to become part of their financial lives.

Digital banking lowers some barriers and creates others

Technology has changed banking by reducing the importance of physical distance. Customers can check balances, move money, deposit checks, lock cards, receive alerts and communicate with a bank without visiting a branch. For people who live far from a branch, work during normal banking hours or have mobility limitations, remote access can turn a difficult service into an ordinary one.

Mobile banking has also changed what low-cost service can look like. A bank that can open and service accounts digitally may be able to reach customers without building a branch network in every community. The World Bank’s latest inclusion data show why this matters globally: hundreds of millions of adults who still lack financial accounts already own mobile phones, creating a potential route into digital financial services if the products, connectivity and identification systems are suitable.

Technology nevertheless introduces a second layer of exclusion. A customer may lack a smartphone, dependable data service or the confidence to complete identity checks and financial transactions online. Older customers, people with disabilities and users with limited digital literacy can also face interfaces that were designed around the habits of more experienced users. Removing the branch without fixing these barriers can lower a bank’s cost while making access worse for part of the population.

Security is part of the same trade-off. Digital access can give customers faster control over their money, but it also exposes them to phishing, account-takeover attempts and other forms of fraud. The Federal Reserve has recently emphasized that responsible innovation can lower costs and expand product availability, while also stressing the need for appropriate safeguards as banks adopt new technologies.^[3] Inclusion is weakened rather than strengthened if a customer can open an account easily but cannot use it safely.

Payments are a major gateway into formal banking

Many people first experience the value of a bank account through payments rather than savings or borrowing. The account becomes useful because an employer deposits wages, a government agency sends a benefit, a customer pays a merchant or family members transfer money to one another. Once those activities move into an account, cash no longer has to be the default method for every transaction.

Faster payment systems can improve this value further. A household operating with little financial cushion benefits when incoming funds become available quickly and outgoing payments can be timed more precisely. Delays that are insignificant to a household with several months of expenses in reserve can be disruptive to someone deciding which bill can be paid before the next paycheck arrives.

Payment inclusion also requires interoperability and broad acceptance. A digital wallet that works only within a narrow network may be useful, but it does not provide the same flexibility as an account or payment service that connects to employers, merchants, billers and other financial institutions. The more fragmented the system becomes, the more likely customers are to need several services simply to perform ordinary financial tasks.

Access to credit is a separate inclusion problem

Owning a transaction account does not guarantee access to affordable credit. The lending side of banking involves a separate assessment of whether a borrower is likely to repay, which means income, existing debt, credit history and other underwriting information still matter. A bank can be highly inclusive in deposit accounts while lending conservatively to people with limited or damaged credit histories.

The difficulty is particularly important for consumers who have little conventional credit history. Someone may have a stable income and consistently pay rent, utilities and other obligations but still have a thin credit file because those payments do not always appear in traditional credit records. Alternative data and cash-flow information can sometimes help lenders evaluate such applicants more accurately, although any expanded use of data also raises questions about accuracy, privacy and fair-lending compliance.

Inclusion should not be interpreted as approving every application. Lending that ignores a borrower’s ability to repay can create its own form of harm, especially when high-cost credit is extended to people with little financial margin for error. The objective is better access to responsible credit and better assessment of borrowers, not weaker risk standards simply for the sake of increasing approval rates.

Customers who are working toward good credit may therefore benefit from becoming visible to the financial system, but visibility is only one part of the process. Reliable income, manageable obligations and a record of repayment remain important because a more inclusive credit market still has to distinguish between borrowers who can reasonably carry a debt and those for whom additional borrowing would create too much strain.

Regulation and product design both shape inclusion

Banks have commercial reasons to expand their customer base, but market incentives do not always produce universal access on their own. Serving customers with very small balances can be less profitable than serving customers who maintain larger deposits, borrow regularly or buy additional financial products. That tension helps explain why public policy and supervision have long played a role in access to basic banking services.

Rules around identification, fair lending, discrimination, disclosures, deposit insurance and consumer protection shape who can enter the banking system and what protections they receive after entering it. That tension helps explain why governments sometimes have to step in and come up with regulations that protect access to basic banking, while broader banking rules also affect whether underserved consumers can obtain useful accounts and credit on fair terms.

Regulation is not sufficient by itself because an institution can comply with the law while offering a product that few underserved customers want to use. Product design, pricing, customer service and distribution determine whether access is practical. Banks that lower minimum balances, simplify fee structures, support multiple ways to deposit and withdraw money and provide useful digital access can broaden participation without treating inclusion as a charitable activity.

Inclusive banking still needs human and physical access

Digital banking has reduced the number of tasks that require a branch, but it has not eliminated the value of human help. Some customers need assistance with identity verification, fraud, estate matters, complex transfers or unfamiliar financial products. Others simply have more confidence completing an important transaction after speaking with a person who can explain what is happening.

Branches and cash access also matter geographically. A bank can offer an excellent mobile app and still be difficult to use in a community with weak connectivity or few convenient places to deposit or withdraw cash. Financial inclusion therefore involves the whole access network, not just whether a bank has an app or whether a customer can complete account opening online.

Preserving choice is especially important during transitions. Banks can encourage customers to use lower-cost digital channels without assuming that customers who continue to use branches, ATMs, telephone banking or cash are simply resisting progress. The most inclusive model allows technology to remove barriers where it can while keeping workable alternatives for people whose circumstances make digital-only banking less suitable.

What more inclusive banking looks like

The strongest measure of inclusion is not how many accounts exist but how effectively people can use the financial system. An account that receives wages, supports ordinary payments, allows small balances, provides predictable costs and gives the customer reliable access to money is more valuable than an account that exists only on paper. The same principle applies to savings and credit: availability matters, but usefulness and affordability determine whether access improves financial life.

Banking is likely to become more inclusive through a combination of technology, competition, better account design and regulation rather than through any single innovation. Mobile access can reach people whom branches do not, faster payments can make accounts more useful, alternative information can help lenders evaluate some thin-file borrowers and consumer protections can reduce the risk that access comes with excessive cost or unfair treatment.

The remaining challenge is harder than simply connecting more people to banks because the people still excluded are not one uniform group. Some need lower costs, some need better digital access, some need help establishing identity or credit history and some need reasons to trust a system they have avoided. Progress will therefore depend on whether banks and payment providers can make mainstream financial services fit a wider range of real financial circumstances rather than expecting every customer to fit the same banking model.