Diversity Insight: Financial transparency is fundamental to financial inclusion
Non-traditional data and data-sharing could help credit unions reach more of their members.
Financial inclusion is essential when promoting access to financial services to underbanked and unbanked populations. According to the latest LexisNexis Risk Solutions Financial Transparency and Inclusion Report, two-thirds of the world’s financial institutions are committed to supporting financial inclusion, indicating that they recognize the importance of this issue and are actively working to address it by providing services to these communities.
Financial transparency, however, is also fundamental to this equation. This is true for credit unions and other institutions. Financial institutions should be able to easily identify their customers and understand their risk profiles, both to maintain regulatory compliance and support business decisions around the customer. And yet, while the recognition of the importance of these concepts exists, roadblocks to achieving them remain.
The Landscape for Credit Unions
Credit unions have a unique advantage when it comes to providing individualized member services in the communities they serve. Close customer ties enable a deeper understanding of members’ financial circumstances, thus offering greater insight to support providing financial planning assistance.
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