At the heart of Equifax’s goal is to help people live their best financial lives. That’s why we’re constantly innovating our solutions to promote greater financial inclusion and empower consumers to take charge of their financial situation.
Recently, our very own David Stiffler, Chairman of the Equifax Foundation and our Head of Corporate Social Responsibility (CSR), sat down with Orlando Zayas, CEO of Katapult for Authority Magazine, who is working on a series on companies that promote inclusion. financial. Together, Stiffler and Zayas dig deeper into the principles of financial inclusion and how Equifax works to support unbanked and underbanked consumers.
Here is an excerpt from the interview:
Zaya: What exactly is financial inclusion?
More rigid: The World Bank defines financial inclusion as access to useful and affordable credit products/services that meet an individual’s needs and are provided in a safe/responsible manner. Financial inclusion is about ensuring everyone has access to basic financial services, regardless of income or socio-economic status. I would highlight exclusion more specifically, especially in America, where exclusion has fallen and continues to fall along racial lines and has meant exclusion from credit, banking, housing, and insurance.
Zaya: What does it mean to be “unbanked”?
More rigid: The “unbanked” are those who do not use traditional financial services such as credit cards and bank accounts; instead, they rely on alternative financial services, such as check cashing services, money orders, and payday loans, which are often expensive.
Zaya: For the benefit of our readers, can you explain some of the typical reasons why someone might be unbanked? Why can’t they just walk into the local bank and open an account? Why can’t they just open an account online?
More rigid: There are many reasons why a person may be unbanked: lack of access, unemployment, minimum balance requirements, distrust of financial institutions, lack of stable income, inability to meet minimum daily balances, etc. .
Some unbanked consumers simply don’t have access to nearby bank branches in their communities (as many have closed), or banks have limited opening hours for consumers who work different shifts.
There are excellent online banking options, but many do not have adequate or reliable internet access. So if someone doesn’t have constant access to the internet, that’s a challenge. And it can also be difficult to do business with an online-only bank.
There are a handful of challengers or neo-banks on the rise. Killer Mike and his team made waves when they announced Greenwood Bank a few years ago, but at Equifax we’re proud partners with Mobility Capital Finance (MoCaFi) who strive to keep consumers and entire communities safely and on a stronger path to safe and resilient finance.
Zaya: This may be obvious to you, but it will help to clarify. Can you explain to our readers some reasons why it is so important for companies to promote financial inclusion?
More rigid: Big question! So many reasons come to mind, but a few stick out: Employees and consumers are demanding more from their employers and their favorite brands, especially when it comes to the commitments of those employers and brands on issues of equity and financial inclusion. Moreover, exclusion, in purely commercial terms, is bad for business. Greater financial inclusion means bigger markets! If you had asked me this question 10 years ago, I would have said this is the right thing for business to do. But if we think along the lines of stakeholder capitalism, there is every reason to believe that we can build a more inclusive, fair and profitable economy.
Removing barriers to financial inclusion is not something that financial institutions can do unilaterally. To be successful, the effort must involve the entire ecosystem working together. Because financial security remains a significant barrier for far too many people, it is imperative that financial institutions, businesses, communities and policymakers all work together, rethink traditional models and enable credit access and inclusion. finance in an innovative way.
To read the full interview with David Stiffler, click here.