What we learnt from serving the unbanked in Southeast Asia

Southeast Asia, with its 680 million population is often considered the next big region for fintech innovation for its explosive growth and favourable demographics. 

Yet, more than half of the region’s population remains unbanked with no access to financial products. Unlike in other markets where banking access is more universal, there’s a staggering number of people left out of financial opportunities and access in Southeast Asia.

This phenomenon hits the low-income workforce the hardest, and living without a bank account is more crippling than one might imagine. The lack of a bank account can be costly to low-income workers, who are forced to find expensive alternatives.  In addition, there’s no safe space for them to store and grow savings for important life events, such as buying a home or sending their children to school. Importantly, it excludes them from healthcare and insurance. 

Digital banking is a good start, but the offering needs to expand

This inaccessibility to the traditional banking system has created the ideal backdrop for fintech solution providers to step in and bridge the gap. Many payment platforms are trying to democratise banking through payment services and other traditional banking services such as savings and investment functions. 

While this is a good start – it doesn’t really address the lack of access to banking services. To truly make a difference, fintech players must work closely with traditional banking institutions to establish a shared, legitimate credit history for their users. Doing this could finally give the unbanked population access to traditional forms of financial support, and open the doors to a whole new suite of financial opportunities.  

Alternatively, digital banks could shake things up entirely by providing their own accredited and recognised form of credit cards, savings accounts and loans through their platforms. At any rate, it’s time to push the boundaries to propel the industry forward, and provide wider financial access to the region’s low-income workforce.

EWA simplifies financial access

Increasingly, Earned Wage Access (EWA) service providers are proving to be a surprisingly simple solution. By withdrawing their wages through EWA solutions that are integrated with banks, low-income workers can track their cash flow and build a credit history. Banks and other services can then reference this to empower underbanked communities. 

EWA services can be easily integrated into a business with no additional cost to the employer, and no change to a business's HR and finance system. The employee then gets onboarded through the EWA app and can track their earnings. If the employee wishes to withdraw their salary ahead of payday, the employee simply makes the withdrawal request through the app and then cashes out the money at the ATM. 

What sets Paywatch apart is our partnership with major banks, which not only allows the employee to withdraw a percentage of their earned salary ahead of payday, but also allows them to build a credit and banking history with our bank partners, automatically including our users into the banking system.  

It is indeed a mammoth task to migrate millions of low-income workers into the banking system, however the benefits for the community - their safety, financial security, and contributions to local economies - cannot be understated. To do this, the fintech industry must push the boundaries further for a more inclusive financial system.

If you’re interested in playing your part in financial inclusion across Asia and need more information on how to get started with EWA, please do reach out to us directly or drop our helpful team at Paywatch a message at bizsupport@paywatchglobal.com