# Minding The Gap: The importance of inclusive financial strategies as digital currencies rise 
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-22
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: The Future of Money: Digital Currencies and Financial
Meta Description: Read all about the rise of digital currencies, the decline of physical cash, and the potential impacts on financial inclusion in this insightful article by Nick Fisher, General Manager, Sales and Marketing, UK, JCB International (Europe).
URL: https://financedigest.com/minding-the-gap-the-importance-of-inclusive-financial-strategies-as-digital-currencies-risehtml

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_By_ **_Nick Fisher,_** _General Manager, Sales and Marketing, UK,_ [_JCB International (Europe)_](http://www.jcbeurope.eu/)

Digital technology is changing the world. What we watch, how we spend and where we socialise is moving toward the digital space. And the growth of these preferences has been accelerated by recent global events.

So, if our social, entertainment and essential shopping habits are migrating to the digital space – what are the chances our cash will too? The signals suggest it is very likely.

The Covid pandemic has accelerated consumers’ migration from physical cash to digital  spend through mobile payments, predominately driven by the convenience and perceived hygiene of contactless payments – and consequently the use of physical cash is diminishing, with only one [in six payments in the UK](https://www.theguardian.com/business/2021/jun/16/cashless-society-draws-closer-with-only-one-in-six-payments-now-in-cash) being completed with cash. There is also the volatile but explosive [rise of digital](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications ") currencies.

Cryptocurrencies – such as the high-profile Bitcoin or Ethereum – have surged as a decentralised alternative to existing currencies. These are purely digital [currencies which make counterfeiting](https://www.financedigest.com/here-are-some-of-the-top-tips-for-spotting-counterfeit-currency.html "Here are some of the top tips for spotting counterfeit currency:") impossible through Blockchain technology, but all have one thing in common. They are only accessible to those customers who have an existing financial product and are willing to [risk the volatility of a currency](https://www.financedigest.com/managing-corporate-currency-risk-the-cfos-balancing-act.html "Managing Corporate Currency Risk: The CFO’s Balancing Act") that’s not regulated by Government backed fiscal authorities. For true [financial inclusion](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs") of digital currencies, I believe they need to be ubiquitously accessible to the population and be backed by a trusted fiscal authority.

[In Sweden](https://interestingengineering.com/sweden-how-to-live-in-the-worlds-first-cashless-society#:~:text=Sweden%2C%20one%20of%20the%20most%20technologically%20advanced%20nations,general%2C%20cash%20is%20already%20a%20no-go%20in%20Sweden.), cash is infrequently used, and by March 2023, cash will no longer be accepted as a means of payment. However, I wouldn’t consider it to be a complete utopia, as there are still demographics such as the elderly and people with disabilities that are finding it increasingly difficult to carry out their daily lives using cash, as more shops and businesses find it too expensive to support cash, so they only offer [digital payments](https://www.financedigest.com/can-i-please-speak-to-someone-why-building-relationships-is-still-crucial-in-digital-payments.html "“Can I please speak to someone?” Why building relationships is still crucial in digital payments").

One of the other basic conditions for the increased acceptance of digital currencies by the general population is the formal backing by central [banks](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") without the link back to cash.  [Sweden officially launched eKrona, the world’s second digital currency backed by a central bank in September 2021](https://www.investing.com/news/cryptocurrency-news/sweden-launches-worlds-second-digital-currency-backed-by-a-central-bank-2612824#:~:text=Cryptocurrency%20Sep%2010%2C%202021%2007%3A00AM%20ET%20Sweden%20Launches,Bitcoin%20or%20others%20that%20exist%20in%20the%20market.). The currency has been available on a trial basis on the official website created by the Swedish government so that citizens can buy and sell within the country or in stores abroad.

Decentralised digital currencies may be making the headlines, but Central Banked Digital Currencies (CBDC) have also been growing in popularity and newsworthiness. [India is set to debut](https://www.ndtv.com/business/indias-digital-currency-to-debut-by-early-2023-2751898) its own official digital currency next year. In the UK, The [Bank of England](https://www.financedigest.com/bank-of-england-set-to-hike-to-4-as-rate-peak-looms.html "Bank of England set to hike to 4% as rate peak looms") issued a discussion paper on its idea for a CBDC in March 2020. Feedback from respondents emphasised that, were the Bank to decide to go ahead with a [UK CBDC](https://www.bankofengland.co.uk/research/digital-currencies), financial inclusion considerations would be prominent in its design.

The winds of change are blowing in the direction of a [digital future](https://www.financedigest.com/42-of-retailers-say-payment-over-time-solutions-are-very-important-to-ensuring-future-digital-innovation.html "42% of retailers say payment-over-time solutions are ‘very important’ to ensuring future digital innovation"). But such great change always runs the risk of leaving people behind. So how can we ensure that this transition is inclusive?

**The digital challenge**

According to [The World Bank](https://www.worldbank.org/en/topic/financialinclusion/overview#1), financial inclusion means that individuals and businesses have access to useful and affordable financial products and services – such as payments, savings, credit, and insurance – and that these are delivered in a responsible and sustainable way.

Financial exclusion is not a new challenge — there have always been people who cannot, or do not want to, participate in the banking system. But as [technology and globalisation accelerate – these people are at risk of being left behind](https://www.financedigest.com/what-is-generative-ai-the-technology-behind-openais-chatgpt.html "What is Generative AI, the technology behind OpenAI’s ChatGPT?") as the world moves away from physical cash.

Businesses could [bridge this gap](https://www.financedigest.com/bridge-the-gaps-in-big-data-and-cross-into-a-world-of-growth.html "Bridge the gaps in Big Data – and cross into a world of growth"). Recent [studies illustrate](https://www.forbes.com/sites/afdhelaziz/2020/06/17/global-study-reveals-consumers-are-four-to-six-times-more-likely-to-purchase-protect-and-champion-purpose-driven-companies/) that consumers want the brands and services they use to have a positive impact on society. An inclusive mindset in the world of payments means [considering the needs](https://www.financedigest.com/7-finance-career-options-to-consider-and-what-you-need-to-know-about-each.html "7 Finance Career Options to Consider and What You Need to Know About Each") of all consumers when looking at innovation and introducing new technology. Fintechs are showing the [way by using technology to bring down the cost of operating financial](https://www.financedigest.com/10-ways-to-make-your-financial-model-easier-to-understand.html "10 Ways to Make Your Financial Model Easier to Understand") products and tailoring them to make them accessible to previously excluded customers.

And there are clear reasons to do this. Firstly, consumers notice when brands do good things – and getting that subconscious ‘green tick’ from consumers is powerful. But it is not just about altruism. It is in the interest of every business to ensure the global market is as accessible as possible – and that there are viable alternatives to digital cash for every participant.

**The [future of financial](https://www.financedigest.com/the-future-of-financial-services-tech-evolution-not-revolution.html "The future of financial services: Tech evolution not revolution ") inclusion**

The last two [years have shown us how quickly habits](https://www.financedigest.com/100-years-of-uk-holidaying-habits.html "100 YEARS OF UK HOLIDAYING HABITS") and behaviours can change.

For the first time, global use of [digital wallets exceeded cash in-store payments](https://www.financedigest.com/italys-nexi-signs-digital-payments-deal-with-tims-olivetti.html "Italy’s Nexi signs digital payments deal with TIM’s Olivetti"). Equally, the pandemic revitalised QR codes – and [in 2020 JCB collaborated with financial services technology provider FIS Global to enable cross-border QR codes in the APAC region](https://www.global.jcb/en/press/2020/202006050001_alliance.html).

But even these technologies require a validated proof of identity to work. In some emerging markets, the challenge of easily ascertaining and uploading verified identification is much more difficult. A potential antidote to this challenge may lie in biometric tech – where users are identified through a fingerprint or a palm scan. Biometric organisations, payment leaders and ‘big tech’ innovators, are partnering to make this a reality,  there is a clear need to support the ‘unbanked’. [At JCB, we signed a deal with](https://www.global.jcb/en/press/2020/202011180001_alliance.html) [VPBank Finance Company Limited (FE Credit) in Vietnam](https://www.global.jcb/en/press/2020/202011180001_alliance.html), an organisation that is quickly becoming a market leader by developing credit cards for first-time credit users.

In November 2020, FE Credit launched two credit cards, powered by JCB, that are packed with benefits which meet the needs of the unbanked. These cards included bespoke loyalty programmes which reward members through everyday spending – as well as Selfie PLUS — a one-click mobile-to-card image upload solution. These systems give confidence to previously unbanked consumers, encouraging them to [digitally transform](https://www.financedigest.com/5-key-takeaways-from-the-finance-sectors-digital-transformation-revolution.html "5 Key Takeaways From the Finance Sector’s Digital Transformation Revolution") their daily habits.

Global [digital transformation](https://www.financedigest.com/redefining-the-human-touch-with-data-driven-digital-transformation.html "Redefining the human touch with data-driven digital transformation") does not happen overnight. To ensure nobody gets left behind, businesses, payments providers and governments alike must put multidimensional [focus on financial](https://www.financedigest.com/cfos-need-a-focus-on-forex-in-financial-planning-tools-accountagility-reveals.html "CFOs need a focus on forex in financial planning tools, Accountagility reveals") inclusion. The more individuals who can digitally access credit, manage payments, build savings, purchase assets, and make investments – the healthier the global economy will be.


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