• Catharina Eklof, Chief Executive Officer at IDEX Biometrics


• 11.03.2025 07:15 am
#FinancialInclusion #WomenInFinance

Women are critical to the world economy yet remain largely underrepresented, and underbanked as consumers. In fact, more than 40% of women worldwide, equivalent to 1 billion women, still lack access to financial services. Financial equity and inclusion involve providing equal access to financial services and economic opportunities for all individuals. However, the gender gap remains a challenge, particularly in developing countries. For example, only 37% of women in sub-Saharan Africa have a bank account compared to 48% of men. This exclusion from the financial ecosystem means women are unable to access insurance, loans, life assurance, or obtain a pension. This also prevents women from launching their own businesses, penetrating the economy on a deeper level. While the disparity is a fairness issue, it is also an efficiency issue. There is a vast untapped market for potential consumer spending and female talent.

Ensuring equal financial inclusion for both men and women is crucial for global economic growth. However, achieving this objective has been challenging due to many persistent barriers including formal identification, digital footprints, skills, and financial literacy.

Focus Group: Female Refugees

Promoting women's financial inclusion is among several powerful means to advance gender equality. However, we cannot make significant progress without truly understanding the reality of women’s lives. Presently, women and girls constitute at least half of the world's total number of refugees. Women represent almost half of the 244 million migrants and half of the 19.6 million refugees worldwide. Whilst the UK was previously mandated by law to spend 0.7% of GDP on foreign aid to support economic growth in these countries, this is now being reduced to just 0.3% - a loss of £6bn.

Women and girls experience significantly different potential vulnerabilities from men and boys. Cultural differences often result in women being assigned a lower social status and made dependent on men, creating obstacles to accessing decision-making positions and safe livelihood and education opportunities. The refugee experience exacerbates these challenges, putting them in situations that create significant vulnerability. In addition to these issues, women face barriers in accessing financial services, legal protection, reproductive, and other health services due to the lack of educational opportunities.

Studies conducted by the UNHCR with refugee women have revealed how low levels of formal education, literacy, or language barriers can lead to increased experiences of marginalization, hindering their access to critical financial and legal resources required for successful social integration.

Overcoming Barriers Through Biometrics

If harnessed correctly, technology can be a force for dynamic economic and social improvement: democratizing access to banking, payments, and formal ID. Digital financial inclusion technology offers innovative solutions that include new identification and verification measures such as biometric smart cards. Technology helps create user profiles that facilitate more effective identity verification, prevent fraud, and enable risk-based monitoring of transactions. Biometric technology refers to the use of technology to identify and verify a person based on some aspect of their biology – their fingerprint, face, iris, or voice. The basic premise of biometric authentication is that every person can accurately and securely identify themselves, by themselves. In cases where illiteracy and rural living are prevalent, relying on passwords and paperwork can be problematic. Biometrics, on the other hand, are inherent to an individual's identity, such as fingerprints. Biometrics are now being integrated into government processes, hospitals, and airports as a secure and expedited means of identifying individuals.

Biometrics for inclusion in motion

In Mexico, Mastercard and specific-purpose payment solutions provider Edenred conducted the first regional trial of biometric card technology in 2019 for individuals in state benefits programs. The trial exhibited the significance of collaborations between public and private entities in implementing effective programs. By streamlining purchase transactions and enabling secure fund disbursement to those in need, the pilot program highlighted the value of biometric technology in facilitating financial inclusion.

Countries such as India and Pakistan have successfully rolled out national digital identity programs, using biometric data to eliminate literacy as a barrier. Women are now also able to utilize their national ID numbers to establish digital financial accounts and directly access government services. The pairing of digital identities and digital accounts has proven to be advantageous for both governments and citizens. In India, millions of people have opened accounts for the first time thanks to the issuance of digital IDs. In Pakistan, the number of women registering for IDs nearly doubled after the government linked the identity system to a social payment scheme.

Biometric payment card programs are also in progress in MEA, and India among other countries, with preparations well underway to bring the solution and the financial inclusion it offers to the masses.

To enable a connected world, seamless payment solutions are essential for individuals, businesses, and non-governmental organizations (NGOs) alike. As payments serve as the backbone for local and global transactions, it is crucial to establish robust industry and regulatory agreements to ensure secure and smooth payments across the globe.

The Role of Women in the Developed World

To promote gender equality in financial inclusion, it is beneficial to have women in influential positions within the financial sector who can advocate for equal access and drive policy changes. Unfortunately, in 37 out of 55 countries studied, women hold less than 25% of the decision-making roles in the financial sector. This lack of representation can lead to a gender bias in decision-making, which may impact the discussion on gender-related issues.

Moreover, financial solutions often do not cater to the needs of low-income women because financial institutions lack knowledge about these customers. According to research by IDEX Biometrics, most women are willing to embrace biometric technology to overcome the digital divide. In Brazil, for example, 91% of women are ready to switch from PIN to fingerprint authentication for in-store payments. Therefore, it is essential to understand the needs and constraints of all consumers to develop inclusive financial products and solutions.

It is key to bridge the gender gap in financial inclusion for women, creating an equitable society, and unlocking significant market potential and talent. Innovative technology, such as biometric smart cards, has been proven to help promote financial inclusion for women by bypassing the need for formal ID, financial literacy, and a digital footprint. Women in influential positions can help drive policy changes and promote gender equality within financial inclusion.