Mobile banking offers solution to the 'unbanked'

A 40-country survey of 150,000 adults conducted last year found that the percentage of adults with a bank account rose from 51% to 62% between 2011 and 2014.

This was driven by a 13% rise in account ownership in developing countries and, in particular, rapid growth in mobile accounts in sub-Saharan Africa, the World Bank said.

The World Bank's Global Findex report measures progress in "financial inclusion", which is defined as adults with accounts that let them store money and make and receive electronic payments. This is critical to ending global poverty, the World Bank said.

"Studies show that broader access to, and participation in, the financial system can boost job creation, increase investments in education, and directly help poor people manage risk and absorb financial shocks," the bank said.

New technology is one way to expand this, the bank said. In sub-Saharan Africa, on average more than 10% of adults have a mobile money account. In Core d'Ivoire, Somalia, Tanzania, Uganda and Zimbabwe, more adults use a mobile account than one at a "financial institution", the bank said.

Governments and the private sector should be encouraged to pay wages digitally rather than in cash, to encourage adoption of mobile accounts. this could boost the number of adults with an account by 160 million, the bank said.

There is still work to be done to expand financial inclusion among women and the poorest households, the report found. In the poorest 40% of households in developing countries, more than half of adults have no bank account. Women continue to have fewer accounts than men: in 2011, 47% of women and 54% of men had an account; in 2014, that had risen to 58% of women and 65% of men. 

This gender gap is biggest in South Asia, where only 37% of women have an account, compared to 55% of men.

In the Middle East, account ownership is low at 14%, up from 11% in 2011. men are twice as likely to have an account as women, and only 7% of adults in the poorest 40% have an account, compared to 19% in the richest 60%. Only 15% of people cite religion as a reason for not having a bank account. Digitising private sector wages would encourage 6 million more people in the region to open accounts, the World Bank said.

"Among those of us passionate about advancing access to financial services for the poor, this landmark new edition of the Global Findex provides data that allows us to see what is working, what isn’t, and how we can focus our efforts most effectively to reach the goal of universal financial inclusion,” said Queen Máxima of the Netherlands, the UN secretary-general’s advocate for inclusive finance for development.

Luke Scanlon, technology law expert for Pinsent Masons, the law firm behind Out-Law.com said that the focus must be on simplifying regulatory regimes to promote technology and services that cater for the unbanked.

"There is always a concern about new regulation and the possibility that it could dampen innovation," he said.