Technological innovation must promote financial inclusion as an essential human right – InsideSources

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The General Assembly of the United Nations adopted the Universal Declaration of Human Rights in 1948, which proclaims the inalienable rights to which everyone is entitled as a human being. This visionary statement is the most translated document in the world, available in more than 500 languages.

Around the world, many have embarked on a mission to achieve the goals set out in that document, however ambitious they may be. As climate change, disease and other forces threaten the lives and livelihoods of the most vulnerable populations, equal access to financial services should be seen as an inalienable human right.

Growing up in Detroit, I’ve seen people struggle with the simple task of collecting their weekly paycheck because they didn’t have a bank account. Anxious to access their hard-earned cash, the quickest and easiest way was to go to a corner store that was happy to cash their check but charged high fees they couldn’t afford but had to pay because they needed to put the food on the table.

In Detroit and so many other cities, it is not uncommon for people who build their American dream to send money to family members in their home countries through remittances, paying usurious transfer fees to private and opaque networks of financial institutions that shred. the money you earned, saved and wanted to share.

It doesn’t have to be that way.

In this digital age, the path to financial inclusion requires technological innovation and the opportunities for a more inclusive global economy are more abundant than ever. Manufacturers and consumers alike are able to connect in more ways than ever, but the same payment models that have ruled out so many in the past still control access to the financial system. The place of check collection can be accessed via a telephone, but it is no less opaque, monopolistic or predatory.

Outdated underlying technology exacerbates the financial exclusion of bankless people around the world, even as innovative services emerge in many countries to bridge the gap. According to the World Bank’s Global Findex, 1.7 billion people still lack access to banking and digital payments, despite the majority of them owning a mobile phone.

Traditional payment networks operate independently of each other, and while sending money via a digital transaction may seem like a giant step from going to a bank branch, it’s still relatively easy if the sender and recipient have accounts on the same network. Cross-network payments are slow and expensive, preserving many of the costs and inefficiencies that have long been a barrier to financial inclusion. Access to digital payments has proliferated, but as long as networks choose to remain closed it is a costly disconnection, affecting the very people who can least afford it.

There is another way: a direction that will help establish financial inclusion as a widely accepted norm. Our organization, the Interledger Foundation, envisions a world where everyone enjoys the fundamental human right to financial inclusion, being able to use open payment standards and technologies that seamlessly connect global society. Monetary interaction should be as easy as exchanging information. Just as we have eliminated barriers to communication and information sharing, everyone should be able to transfer the money they earn without barriers or friction.

Using an open payments network where anyone can seamlessly earn, buy, sell, trade and share will create fair pathways for financial access and participation. It will ensure that the unbanked and underbanked have the opportunity to break the generational cycles of poverty and create a path to the middle class. In addition, it can provide everyone with a safer, more transparent and convenient banking option. This is not a utopian concept; It is a complex but achievable goal that requires commitment and collaboration between technology leaders, central banks around the world, governments, policy makers, creators and civil society.

The centrality of digital rights has already been recognized by the United Nations, with the Secretary General’s Roadmap on Digital Cooperation adopted on 11 June 2020. Its principles include “ensuring digital inclusion for all, including the most vulnerable” and “achieving universality connectivity by 2030 “.

It is an ambitious goal, but so was the creation of the United Nations and their declaration on human rights. And so was the development of the Internet itself.

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