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How can AI be used to increase accessibility to financial services for underbanked populations?

Curious about AI in banking

How can AI be used to increase accessibility to financial services for underbanked populations?

AI can play a significant role in increasing accessibility to financial services for underbanked populations, addressing one of the key challenges in financial inclusion. By leveraging AI technologies, financial institutions and fintech companies can extend their reach to underserved communities and provide them with essential banking and financial services. Here are several ways AI can enhance accessibility for underbanked populations:

1. Alternative Credit Scoring: Traditional credit scoring models may not work for individuals with limited credit histories. AI can analyze nontraditional data sources, such as mobile phone usage, utility payments, and transaction history, to assess creditworthiness and offer loans to those without a formal credit history.

2. Chatbots and Virtual Assistants: AIpowered chatbots and virtual assistants can offer 24/7 customer support, helping underbanked individuals navigate financial services, check account balances, initiate transactions, and receive personalized financial advice.

3. Mobile Banking and Apps: AIdriven mobile banking apps can provide userfriendly interfaces and simplified account management, making it easier for underbanked individuals to access and manage their finances using their smartphones.

4. Voice Banking: Voiceactivated AI interfaces can enable individuals with limited literacy skills or disabilities to access financial services by using voice commands. This promotes financial inclusion among diverse populations.

5. Fraud Prevention: AI can enhance security measures, preventing fraud and identity theft, which disproportionately affect vulnerable populations. Advanced fraud detection algorithms can identify suspicious activities and protect customers.

6. Language and Translation Services: AIpowered language translation tools can help underbanked populations access financial information and services in their preferred languages, removing language barriers.

7. Personalized Financial Education: AI can provide tailored financial education and literacy programs to help individuals understand banking terms, savings, investments, and budgeting. This empowers them to make informed financial decisions.

8. Remittance Services: AIdriven platforms can offer costeffective and efficient crossborder remittance services, allowing underbanked individuals to send and receive money from family members working in other regions or countries.

9. Digital Identity Verification: AIbased identity verification systems can streamline the account opening process for underbanked individuals, reducing the need for physical documentation and inperson visits to banks.

10. Microloans and Savings: AI can enable microfinance institutions and digital banks to offer small loans and savings products tailored to the needs of underbanked customers, facilitating financial growth and stability.

11. Blockchain for Financial Inclusion: Blockchain technology, combined with AI, can provide secure and transparent financial services to underbanked populations, particularly in areas with unreliable or nonexistent traditional banking infrastructure.

12. Accessibility Features: AI can enhance the accessibility of digital banking platforms for individuals with disabilities by providing features like screen readers, voice commands, and Braillecompatible interfaces.

13. Credit Counseling: AIpowered financial advisors can offer personalized credit counseling and debt management solutions to help underbanked individuals improve their financial health.

14. Community Banking Models: AI can support communitybased banking models and credit unions, providing financial services tailored to the unique needs of local underbanked communities.

To maximize the impact of AI in increasing financial accessibility, collaboration between financial institutions, fintech companies, regulatory bodies, and nonprofit organizations is essential. Additionally, privacy and data security measures must be in place to protect the sensitive information of underbanked individuals. By leveraging AI responsibly, the financial industry can help bridge the financial inclusion gap and empower underserved populations to access and benefit from essential financial services.

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