Posts provide financial services to 28% of adult population worldwide, must seize digitization opportunity

The Universal Postal Union (UPU) announced the release of the Global Panorama on Postal Financial Inclusion 2016, its flagship publication on the contribution of postal networks to financial inclusion.

The study reveals that 91% of Posts worldwide offer some form of financial services, either on their own or in partnership with other financial institutions. A total of 1.5 billion people globally – or 28% of the world’s adult population – access services such as remittances, government payments, insurance, current accounts, savings, or loans, through a postal channel. Among these, 1 billion people – or 19% of the world’s adults – hold a current or savings account with a Post.

Since the creation of the first Postal Savings Bank in Great Britain back in 1861, postal operators have greatly contributed to financial inclusion, in small and large countries alike. This is the case in Namibia, for example, a country with 2.2 million inhabitants where 39% of the adult population (600,000 people) has an account with the Post. The same is true for China, where 43% of the adult population (490 million people) has an account with the Postal Savings Bank of China.

Studies published in 2013 and 2015 by the UPU, in collaboration with the World Bank and UN Women, reveal that Posts are comparatively better than other financial institutions in banking segments of the population that tend to be excluded, such as women, the poor, the less educated and those in the informal economy. Postal networks therefore represent a key opportunity to address the needs of the two billion people worldwide that have no access to financial services.

A call for action: the necessity to digitize

Posts own one of the largest physical networks in the world with 661,000 post offices worldwide – and an additional 1.4 million postmen going door-to-door daily – i.e. a potential of 2 million contact points. To be able to sustainably cater to the needs of excluded, low-income populations, however, Posts need to provide financial services at scale… and at minimal costs. Clients also have evolving needs and want to be able to use their financial services everywhere, at any time. Posts are therefore at a turning point: they need to adapt in order to remain relevant as providers of sustainable and inclusive financial products. They need to digitize their financial services, making them available on multiple delivery channels (mobile, card, Internet, ATMs, etc.), in addition to their physical post offices.

The Global Panorama on Postal Financial Inclusion 2016 puts forward the different business models that have been adopted by postal operators to deploy digital financial services and calls postal operators that have not fully digitized their operations to do so urgently, or risk being completely marginalized as financial service providers. In addition, the study presents the various models adopted by the 52 Posts worldwide that have already started offering their financial services through a mobile platform.

The Financial Inclusion Capacity Index

Using data provided by 161 postal operators, the study established a financial inclusion capacity index, which illustrates postal operators’ potential to advance financial inclusion in their country. This index combines several factors, such as the density and level of connectivity of the postal network, staff capacity, level of automation of operations, security and cash logistics, and the legal framework.

Based on this index, countries where the financial inclusion rate is low and where the postal operator has a strong capacity have been identified. To mention but a few, Burundi, Burkina Faso, Senegal, Benin, Armenia, Moldova, Comoros, Malawi, Togo, Kyrgyzstan, Tunisia, Indonesia, Morocco and Belarus all stand out as countries where there is a strong potential for Posts to advance financial inclusion. The Global Panorama on Postal Financial Inclusion 2016 can be found here.


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