We know that Southeast Asia has many unbanked and underbanked people. So, what are unbanked and underbanked people? Are they the same or different types of people in the financial world? Now you’ve got all the answers in this essay.
Unbanked people are the people who don’t want to use banks or banking institutions in any capacity although they can and have the conditions to do it. With them, cash is king, and they pay for everything with this payment.
Unbanked people also typically do not have insurance, pensions, or any other type of professional money-related services. They may take advantage of alternative financial services, such as check-cashing and payday lending if such services are available to them.
The first reason is the cost. When you open a bank account, transact money through banks, or even borrow money from a bank, everything requires a certain fee to pay.
The second reason is forgetting the pass or pin code of bank cards. When you open a bank account and receive a card from a bank to be able to withdraw money at an ATM. It will be annoying if you have amnesia and mistakenly press the pin 5 times. At that time, you have to go to the nearest bank branch to apply for a pin code and start having to keep remembering this number for future transactions.The last reason is the psychology of using cash is the safest for Vietnamese people. Many middle-aged and older people in Vietnam always hold the notion that using cash is the most convenient and safest.
"My wife used to joke with me, "You want me to be happy and safe, just give her cash to keep, those banks I don't know how to use”.
D, a Project Manager of FPT shared
Furthermore, some items in Vietnam are priced so low that you can't pay via card or other digital payment to lose an unwarranted fee, and the places that provide those products are accepting only cash (for instant sidewalk eateries or grocery stores, etc.).
In contrast with unbanked people, underbanked people are those who do not have access to traditional banking services because of poverty or some other circumstances.
The answer is finance combined with other technological factors and constituted "fintech". This word has been really popular in recent years. The continuous development of fintech has pushed some people in the unbanked group to accept access to financial services because of its convenience and speed.
Imagine you are using an e-wallet that even the roadside noodle shop lady uses, the alley motorbike taxi driver also uses, etc., and when you don't have cash on hand to pay for the cost that their products and services provide to you, they immediately ask: "Do you use MoMo?". I firmly believe that all the most demanding people want to use it.
For the underbanked, fintech gives them a solution that makes it extremely easy to access financial services. Now, with just a few basic eKYC steps, you will be able to open a bank account and perform other operations to access financial services more easily (with just a few buttons) without cumbersome procedures and complicated documents.
For unbanked people, the best solution for them is to use e-wallets and some digital payment-related services such as payment gateways, etc.
The solution for underbanked people is using some digital banks or NeoBank. In addition to receiving remittances from abroad, they should use international NeoBank just like FinFan, a Neobank specializing in cross-border payment and money transfer in Vietnam, which had a License of Foreign Currencies Acceptance and Payment approved by the Central Bank of Vietnam in 2014, licensing from our Strategy Bank to do Banking services, and was the first entity in Vietnam allowed to disburse money into E-wallet.
We operate based on the values of transparency and trustworthiness to provide products as a Neo-bank, such as CASH – IN & CASH –OUT (Payroll, e-Commerce, Import-Export, etc., Cross - Border Payment (Over 150 countries + currencies), Remittances (strong currencies like GBP, AUD, EUR, USD, CNY with competitive FX rate), Virtual Cards.
We are proud that we not only became the first Vietnamese non-bank partnered and integrated with Ripple Net but also partnered with over 20 top global brands as MoneyGram, Thunes, Remitly, Ria, Terrapay, PaySend, etc.