Financial inclusion supports inclusive development. It is a key enabler for many of the Sustainable Development Goals and it is also at the heart of the G20 agenda. Notwithstanding the progress made to date in advancing financial inclusion, almost half of the world’s young adults (aged 15-24) are financially excluded. This report examines which young people are more likely to be financially excluded, the factors contributing to financial inclusion, the opportunities and risks brought about by digitalization in relation to youth financial inclusion, and country approaches to advance youth digital financial inclusion.
Digitalization and access to digital financial services may offer ways to overcome some of the challenges that impede youth from accessing and using financial services, such as physical infrastructure barriers or high costs, by offering convenient, faster, secure and
timely transactions and adapting to specific needs through customization. Digital financial services, when provided in a responsible way within a robust infrastructure, may contribute to increased resilience of the financial sector and of individuals in times of crisis. Within
the current environment, as governments around the world respond to the health, social and economic effects of the COVID-19 pandemic, the opportunities provided by digital means for individuals and businesses to continue accessing and using financial products and services, are important and relevant.
Children and young people have access to personal digital devices earlier and earlier in life, in some countries as young as seven or younger. They are commonly referred to as “digital natives”. This brings new prospects for existing financial institutions, such as banks, credit unions, or microfinance institutions as well as new Fintech companies to develop digital products and services for youth, alongside traditional financial products and services. The report considers opportunities for bringing youth into the formal financial sector in an
the appropriate and age-sensitive way through digital innovation and technology taking into account broader contextual factors affecting financial inclusion, since digitalization is not experienced in isolation.
At the same time, it is equally important to acknowledge the potential risks of technological innovations, especially when considering their impact on young people. The report, therefore, recognizes that access to digital financial services must be supported by digital and financial education and provided in an appropriate financial consumer protection framework, in the context of broader child protection policies.
Find the full report: http://www.oecd.org/daf/fin/financial-education/advancing-the-digital-financial-inclusion-of-youth.pdf