According to World Bank two billion of the world’s population are without access to basic financial services.
Community banking, including credit unions, savings banks, microfinance and other non-bank financial institutions, is the key to sustainable financial inclusion.
Community banking operates on principles of saving and thrift for provident and productive lending, essential for providing a path out of poverty.
But local community banking is under threat.
Customers are being offered an array of financial products straight from their smartphones.
Quick, east credit at rates of 600% or more.
Fuelling impulsive consumption, with the unintended result of transferring wealth from the poorest to the top 1% outside the country.
To remain relevant and competitive, community banks must digitise by providing modern digital services at reasonable rates.
Some are opting for the quick fix, partnering with one of the Fintechs.
But what happens to the community bank when that apps starts selling other financial producers direct to their customers?
They are giving up their customer base to a competitor for a ting commission.
Is there an alternative?
Yes, there is.
At Temenos we understand the need to strengthen and support community based banking.
We’re the world’s leading banking software vendor, providing the technology and infrastructure used by the world’s leading banks and Fintechs.
The biggest challenge of digitising has always been the cost of software, computer services and the expertise to run new systems.
But that isn’t the case now.
By taking a shared services approach in the cloud, sharing common software, computer infrastructure and service centres, our subscription-based software as a service can quickly implement the features community bank customers want, without the one-off investments in software, hardware of in-house technical expertise.
It isn’t expensive to run, on payments alone the first few transactions pay the entire cost of the services, future-proofing the network.
It’s a proven model, 240 Temenos inclusive banking clients have over 20 million members in 46 countries.
Over the past 18 years, Temenos client banks have dispersed upwards of 1 billion loans as the financial technology sector’s biggest investor in R&D, we’ll continue to innovate and support community banking for many years to come.
To provide the services that are key to financial inclusion creating wealth and growing local economies.
The world’s most vulnerable communities need access to affordable, trusted financial services before it’s too late.
In Kenya, more than 2.7 million people have been blacklisted and excluded for small unpaid Fintech loans, 400,000 over loans of less than $2.
The community banks that have their own digital services, keeping customers spend within their own community banking network will be the banks that grow and serve their communities.
Providing modern and profitable digital services for generations to come.
It’s time to act, tomorrow may be too late.