This week, thousands of bankers and financial officials from around the world are gathering at the Sibos conference in Dubai to discuss the current state of the world's financial systems.
Yet, a significant percentage of the global population will not be represented - the 2.5 billion people who live on less than $2 a day. Fewer than 20 percent of these people - especially women and the rural poor - have no bank account, no insurance, and no access to credit.
Shut out of the formal economy, the world's poor must rely on cash and trading in physical assets such as livestock and jewelry to pay for goods and services and manage their daily financial lives. Lacking access to even the most basic financial services, the people who can least afford to, must use costly and risky informal payment methods to send and receive money.
Expanding access to the kinds of financial tools and services most of us take for granted could help alleviate some of that risk, dramatically reduce fees, and provide a critical lever to help people lift themselves out of poverty.
Leveraging the rapid growth of existing mobile networks and the near ubiquity of cell phones, new digital payment systems can reduce transaction costs by up to 90 percent - making it not only easier for banks and other financial institutions to extend their services to the poor, but a sustainable business proposition.
Mobile money systems around the world are showing real promise to help poor families easily and safely deposit, withdraw, and transfer money. There are already 30 million active mobile money accounts and reach 86 percent of Kenyan households, 47 percent in Tanzania, and 43 percent in Uganda. Demand for these services is growing rapidly with millions of users also in countries like Bangladesh, Pakistan and Zimbabwe.
Innovations like vaccines and high-yielding crops have changed the future for billions of people. We are on the cusp of another breakthrough innovation--including the poor in a financial system that increases instead of limits the value of their assets. Transforming the underlying economics of financial services through digital currency will help those who live in poverty directly. It will also support a host of other development objectives, including improved health and agricultural productivity by making it easier to pay for essential goods and services.
Just as innovation opened up banking services to a growing middle class over the last 100 years, shifting to newer digital payment systems would empower the poor to better manage their money, create new businesses, manage risk, and improve their lives.
These advances could also be game-changers for the financial services industry, which until now, has not identified a sustainable business model to serve low-income consumers.
This is a unique moment in time when we have the means to revolutionize the lives of the poor by empowering them to manage their futures.
But we can only do this if policymakers, investors, bankers and the private sector work together. As the Sibos conference continues, the conversations among bankers in Dubai should include a serious discussion about how to include a third of the world's population in the financial systems that power the global economy.
This post was written by Rodger Voorhies. Rodger is director of the Financial Services for the Poor initiative at the Bill & Melinda Gates Foundation.