Data continues to demonstrate the role technology plays in accelerating financial inclusion and economic resilience.
Economies that are investing in their financial digital infrastructure are also seeing improved savings habits among their populations, according to data from the 2024 Global Financial Inclusion Index.
“The benefits of these investments are particularly evident during a year of pronounced economic stress,” says Seema Shah, chief investment strategist for Principal Asset Management. “As lending became scarcer, and with the helicopter money of Quantitative Easing in the rearview mirror, our data shows the impact of connected, tech-enabled financial systems on resilience and business confidence.”
Of the 39 markets in the Global Financial Inclusion Index where World Bank data is available:1
29 markets (74%) have gross domestic savings as a percentage of GDP above the global median.
Of these, 79% (23 markets) improved their scores year over year for presence and quality of fintechs.
10 markets (25%) have gross domestic savings as a percentage of GDP below the global median.
Of these, only 60% (six markets) increased their fintech quality scores.
There are several driving factors behind this trend. Fintech companies provide access to digitized banking services that encourage saving, particularly among underserved populations. Equally, the educational resources offered by fintech platforms can aid financial literacy and understanding, helping people make financial choices in their best interests.
Dive deep into data: Download the full 2024 Global Financial Inclusion Index report (PDF)
The markets that fall below the global average for savings as a percentage of GDP are not exclusively poorer economies; they include the U.S., and the U. K., both of which have seen their scores for fintech presence and quality fall year over year (albeit the U.S. remains in first position).
Conversely, those markets far above the median line for savings are not all wealthier economies. They include China, India, Vietnam, Indonesia, and Thailand—all of which saw improvements in their fintech scores year over year.
What does this tell us? The U.S. and U.K. have well-developed financial systems that facilitate good access to services such as bank accounts, which enable people to save. However, these mature, backward-looking markets fall behind younger, forward-looking markets in Asia in ensuring their financial infrastructure is tech-enabled and suitable for a modern, digitized economy. A more digitized financial system allows people to smooth their consumption, more easily track saving and spending, and push income potentials higher.
“More inclusive financial systems where people can easily access their money and get guidance on how to manage it is a powerful driver of wealth creation,” Shah says. “The higher household savings rates in economies with rapidly developing fintech sectors is evidence of greater household resilience during downturns and the foundation of growth through investments.”
What’s next?
Explore more Global Financial Inclusion Index insights.
