Financial inclusion? We call it shared-value banking

Many financial institutions may still view the financial inclusion of women as a problem to be solved. As a shared-value bank, Discovery Bank wants everyone to make social and economic progress, for good.

One of the trending topics this Women's Month, and every month, really, is the financial inclusion of women in the formal economy. Financial inclusion means giving people and businesses access to useful and affordable financial products and services that meet their needs in a responsible and sustainable way.

Financial inclusion has been set as a target in 8 of the 17 Sustainable Development Goals, and is key to reducing poverty and improving people's resilience, wellbeing and economic growth.

Giving people access to financial products like insurance, credit and investments is good for their day-to-day living and their ability to achieve long-term goals and be prepared for unexpected emergencies.

The challenge

Globally, women still make up the majority of the "unbanked" population. And yet, studies have shown that women are more likely to save informally compared to men.

South African women are more financially included than women in other Southern African Development Community countries like Botswana, Eswatini, Lesotho, Mauritius or Zimbabwe. This is largely because of the distribution of grants by the South African government to over 18 million recipients.

But having a bank account doesn't equal financial inclusion. Only 28% of South Africans with a bank account actively use it, while the vast majority only use it to receive money and withdraw it.

The opportunity

Banking has stayed the same for hundreds of years, where a client's risk was determined by their socio-economic status only. But as a shared-value bank, Discovery Bank understands that the nature of risk in banking is as much behavioural as it is socio-economic. This prompts us to ask: what are the barriers to the financial inclusion of women and how can we solve it through behaviour change?

In South Africa, a large majority of women across cultures face the following constraints, both as individuals and entrepreneurs:

• Lack of financial knowledge, skills and literacy
• Race, class and family values that prevent women from taking responsibility for finances
• Lack of access to urban spaces where financial institutions are situated.

Now, imagine there was a bank that believed:

• It's not about how much you earn, but how well you manage what you earn.
• You should be able to bank anywhere and at any time with a bank branch in the palm of your hand.
• Banking is about your financial wellbeing, building a community of people who manage their money well, and making a meaningful impact in society.

That is shared-value banking . Anyone can open a Discovery Bank account from as little as R10 a month. And, through the Vitality Money programme, we offer clients incentives to make better financial decisions with the money they have. As you manage your money well, you create less risk and more value, which we share back with you through improved interest rates and rewards.

Better interest rates mean more earnings on savings and lower payments on debt, which in turn lead to more deposits into savings accounts and fewer defaults on loans. And in a country with one of the lowest savings rates in the world where almost 78% of household income is spent on debt, this is a significant shift towards creating a savings culture and reducing national debt levels.

Plus, we help our clients every step of the way with financial education and tools to master their financial behaviour. These include:

1. Access to Worth Financial Education on the Discovery Bank app for only R399 instead of R4,999.
   •  Exclusive! Read women's success stories with Worth
2. The Vitality Money Financial Analyser in the banking app that makes budgeting easy. Clients can get a simple, real-time view of their finances, and see exactly how much they save and spend in a month.
3. Vitality Money calculators that show clients how financially healthy they are and give them the steps to build financial independence and resilience.

Through all these tools, incentives and rewards, we're working towards increasing wealth and financial resilience for society as a whole. And that's just the start of what a shared-value bank can do.

Read our white paper on The application of shared value in banking (PDF) to find out more.

The Future of Banking. Now.

This article is meant only as information and should not be taken as financial advice. For tailored advice, please contact your financial adviser.