2024 Global Financial Inclusion Index data suggests newly installed governments prioritize financially inclusive policies and initiatives.
2024 will be remembered as the year of the election, with more voters than ever before heading to the polls in at least 64 markets across the world, representing nearly half of the global population. In a year of elections, creating a strong economy that enhances populations’ sense of financial security appears to be a priority for governments across the world.
“Voters notice, and keenly feel, the impact of actions designed to improve their financial security,” says Kamal Bhatia, CEO of Principal Asset Management, “be they from government or the broader financial system which, in many parts of the world, are closely interconnected.
“Whether they are measures introduced at a state policy level, such as France’s pension reform or Argentina’s recent tax reforms, or simply the ability of the major national financial institutions to offer affordable lending, individuals are highly sensitive to the degree to which they feel that financial products, services and policies are fair, accessible, and supportive of financial peace of mind.”
By the time we gathered 2024 Global Financial Inclusion Index had data, seven markets within the Index held national elections (between January 2023 and March 2024), including Argentina, Indonesia, New Zealand, Nigeria, Taiwan, Thailand, and the Netherlands. Five of these improved their financial inclusion ranking, with one remaining flat (the Netherlands) and one falling (Indonesia).
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Seven additional markets were, or are scheduled to have, a national election after March 2024: the U.S., U.K, France, Ghana, South Africa, India, and Mexico. Polling indicated that in five of these (the U.S., U.K, France, Ghana, and South Africa) there would either be a change in the ruling party or a close and contentious outcome. Interestingly, and in contrast to those markets where elections had already taken place, none of these five markets saw their financial inclusion rankings rise: the U.S. fell by three places and the U.K. by four places, while the others remained flat.
However, the two markets where the election was widely forecast to be won by the incumbent party (India and Mexico) saw their rankings increase by four and three places, respectively. India’s result is more open to interpretation; Prime Minister Modi remained in power, but he lost his super majority and wider sentiment surveys attributed this, in part, to dissatisfaction with his economic policies.
Trends in Index data are reflected in the way populations feel.
In the seven markets where national elections took place between January 2023 and March 2024, five improved their ranking in terms of how financially included their populations believe they are, according to 2024 consumer sentiment data—mirroring the main Index data. Indonesia’s ranking fell, as it did in the main Index.
In the seven markets that were or are scheduled to have a national election in 2024 after March, only four out of seven rose in the consumer perception rankings. In the five markets where a change of party or contentious outcome was expected, three markets fell in the rankings (U.S., France, and Ghana).
As in the main Index, India and Mexico increased their consumer sentiment rankings by two and 12 places respectively.
“The data suggests newly installed governments prioritize either implementing financially inclusive policies or enabling a business and financial environment that fosters financial improvement,” Bhatia says. “The rises in scores and rankings in these markets over such a short period suggest such changes can have a meaningful impact on economies and societies quickly.”
The only market where consumer sentiment does not appear to move in line with the Index data is the U.K., where its ranking for consumer perception of financial inclusion rose by one place versus a fall in the main Index of four places. However, this one place rise is due to the removal of Israel in this year’s data, meaning that its ranking is flat in real terms.
Clearly, a strong economy and policies explicitly designed to support economic growth are a large part of a populations’ sense of being financially secure and supported by their government. However, while economic policy and policies designed to promote financial inclusion naturally overlap, they are not one and the same.
For instance, indicators within the Index—such as availability of government-provided financial education, the awareness and uptake of government-mandated pensions and savings initiatives and, to an extent, consumer championing regulation—are all measures implemented by governments, and in some cases the financial system, designed to help people better understand their financial circumstances, feel more supported to make more informed choices, help them plan for the future, ensure they have adequate long-term savings, and access finances at the point of need.
The combination of governments—old or new—seeking to promote a healthy economy and a population that is able, informed, and eager to access the benefits, appears to be high on the list of expectations of potential voters.
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