select us here on our to international thanks for watching. there's more on our website are to to come. i'm, they show on josh, and i'll see you on the top of the hour. the while it seems like we have many different payment methods, these days between paypal, venmo, credit cards, apple pay or alleys. hey, there's still a significant portion of the world who does not have access to these technologies, or to even a traditional bank without access to banks. this makes a harder for these people to access other things like loans for housing, cars, from any of life, other expenses causing an ever growing risk and income inequality. i'm christy, i'm, you're watching the cost of everything. where today we're going to be delving into

the depths of the and bank population of the world. the i'm bank is an informal term for adults who do not use or have access to traditional banking and financing services, including savings accounts, credit cards, or personal checks. the banks are often concentrated in less developed countries or in core regions of developed countries. and they generally pay for things in cash, money orders, or prepaid debit cards, a lack of money, trust and privacy concerns are 3 of the main reasons why people remain on banked. the main reason is that people can't meet the banks. minimum requirement balances, lack of trust and banking institutions was also a big reason as given the history of lending discrimination experienced by blacks and latinos in the u. s. as they have been targeted for predatory lending, including sub prime mortgages. recent immigrants have also experience banking

crisis in their countries of origin, so they may also lack trust and banks. and there are more than 1700000000 adults who are on bank that is just under a quarter of the global population. while most of us take access to financial services for granted, the on bank have no access or protection for their money from desks or loss, they're more likely to be poor and to stay poor as well. financial exclusion is expensive as it impacts people's quality of life and prevents them from investing in their future. it leaves them with limited safeguards, if they lose their job or fall ill, making them vulnerable to predatory lenders. women account for most of the on bank making it 56 percent of all. i'm banked adults globally, even in countries with a small percentage of and bank individuals, women account for the most. well,

financial exclusion is costly, not only for those directly affected, it also impedes nations, economic growth and development, broader access to banking, savings, and lending products could boost g d p by up to 14 percent in large emerging countries such as india and up to 30 percent in frontier economies, such as kenya, barriers to providing this population with banking services have increased over the century. traditional banks tightened credit access in the wake of the global financial crisis, and now it can take up to 6 months just to open a bank account. but there is hope the advent of fintech and the rise in smartphone usage is nearing the chasm in respect to financial inclusion. the indian governments digital india initiative aims to transform the country into intentionally enabled society. and this has significantly increased financial inclusion in india, particularly among the i'm bank population. according to the world bank,

the percentage of adults with a bank account in india, search from 35 percent in 2011 to 80 percent and 2021 largely due to the government's efforts to promote financial inclusion. india has the fastest fintech wealth within an acceptance rate of 87 percent compared to the 64 percent global average. however, despite increased internet usage and tremendous growth, a 190000000 indians are still on banked. india is an economy where 90 percent of transactions are still made in cash. in countries like kenya and nigeria and south africa are also at the forefront of africa. spin teck boom, things to high smartphone penetration fintech started ups are able to give african customers a level of access that traditional banks do not offer. and now today we're joined by professor richard wolf, economist and founder of democracy at work. now,

professor, could you provide an overview of the global on bank population and our, their regional variances and the prevalence of and bank individuals and what factors contribute to these disparities? yes, the number one, the overwhelming cause of people being on binary. and by that we simply mean lacking access to the normal collection of banking activities, banking services, savings account checking, account, credit cards, loans of various towards the basic and fundamental reason today is the same one that existed 2050, a 100 years ago. it's poverty, it's the getting a quality of wealth and income. let me explain briefly. first of all, banking is a profit making industry in most parts of the world and has been in

most cases. there are some examples of governments taking over banks. there are some examples of credit unions and other collective forms of banking, but the overwhelming dominant form of banking activity is as a private enterprise operation. therefore, it's number one objective. it's bottom line has been profit profitability. and the reality is, since it costs money to deliver banking services at and they want them to be profitable, the banks charge significant amounts of money for providing banking services, $1.00 way or another. and the problem is that huge parts of every country, some more, some less, but use parts of most countries are too poor to make banking

profitable, serving them. so these people are ignored by others just to the bottom way to describe this basic way you are. there's not enough profit in certain communities in certain parts of the world. basically the poor parts. there's not enough profit for banks to go in to. busy those parts of the world to do the banking because it isn't profitable. and this has led to either no banking access on bank the bowl or sometimes to do the decision by a government often under the pressure of people from below, for people to provide banking services as part of the government's provision of free services. in other words, like

a government can provide access to a public park maintained by the state to have the, the play still wants to place to have a picnic in a bark. and the state pays for that. you go to the park for free. there are examples in the world where the government has provided banking services as a free public services. and for example, since i know it personally, there are countries in which the post office provides, in addition to the mail services that post office is always provide. post office is offered banking to people in every little village in town, regardless of how much money they may or may not have. they provide it as a public service to make up for what the private enterprise banking system

leaves unattended to. and what are the economic and societal costs associated with a high on bank to population, including the impact of productivity and coming to quality and g d p growth? yes, well, here's the problem. many. the g d p is a rough number, stands for gross domestic product. it's a rough measure of the total output of goods and services per year in a city in a state, in a country in the world, right? it's just a rough measure economist use to. but it's a measure, so it's a question, how does the society keep track of all of the goods and services that are produced? well, one of the ways they do it is by following the payments. the g d. p adds up all of the dollars here in the united states, for example, all of the dollars that are spent for food, or clothing, or shelter,

or transportation, orange attainment. and who keeps records of all of the banks. so if you don't have people working through the banking system, many of the actual transactions on not recorded anywhere because they are handed by me giving you some cash and you taking the cash as payment for what you do. so the 1st problem is, we don't know very much about all of the millions of people in every country that sizable or on bank because their transactions are often not counted, not measured, not added. and you have the either ignore them, which means the numbers are not very relevant. or you make estimates. people like big jobs making estimates, guessing what that might be. but then use this dyslexia, g, d p is

a guess model analysis. it's i guess. and we would be better off knowing precisely how we're doing, whether our output is going up or down. if we could measure through a banking system that records everything, rather than having no information other than an occasional questionnaire or some other form of gathering information, which are less reliable, less systematic, and don't include everybody. so even before you get to an impact on the gd, be the very idea of what the g d p is, is compromised by having on banking. and then finally, the on things people are often, again unable because they don't have that and getting access to get a job. if they got a job, they'd be the g d b, they would add whatever they produce in the restaurant and the store in the factory,

they would add that that would be part of the g d p. but they don't get a job. not because they don't work hard, they do not because they don't have skills bad them. it's because they don't have a bank account. and if i don't have a bank account, then they don't get the job. an employer faced with 2 candidates for a job more or less equal in what they bring in education and skill and experience. if there's one that has a credit rating on a bank account and the other one doesn't, the job will go to the bank. the person 9 times out of 10 rather than to the on the and that affects how much goods and service will produce. because there's no reason to assume that the only bank person doesn't have the job capabilities, the discipline and so on to perform well all in a job. thank you so much professor. wal, for please stick around. professor richard wolf will stay with us right here after

the break. and when we come back, how tasha societies are going to make things worse for the on bank. we'll have more for you after the break. the look forward to talking to you all that technology should work for people. a robot must obey the orders given by human beings, except we're so shorter that conflict with the 1st law show alignment of the patient. we should be very careful about visual intelligence. the point obviously is to great trust, rather than see it, the job with artificial intelligence,

we have so many with the in the a robot must protect this phone existence with alexis the nations like sweden and norway, south korea and australia are increasingly becoming. tasha society is making it more difficult to pay with paper bills. meanwhile, nigeria, china, india, pakistan, bangladesh, indonesia and egypt are the top 6 economies where the on bank population is the largest on a global level, the regions with the highest but portion of developing or emerging economies, top less with the middle east and africa at 50 percent where the population is

financially excluded, followed by south and central america at 38 percent eastern europe at 33 percent and asia pacific at 24 percent. even in industrialized and developed countries like the us, the on bank americans spend around $3000.00 in annual cost per person. ports, fees for money, orders, prepaid cards, etc. higher fees are charged to open and maintain accounts. and check cashing outlets tend to charge as high as 10 percent of face value. while government or payroll checks cost up to 1.5 percent of face value. prepaid cards also have fees associated with them and cannot be used everywhere. migrant workers who send a portion of their wages back home have an average of 7 percent transaction fee for, for women's us. however, they can be as high as 15 to 20 percent depending on the receiving country. in total non bank financial institutions, cost on bank consumers, a $173000000000.00

a year, and fees and interest and take indirectly. there are much higher costs without a bank account. there's no credit history without a credit history and bank people will not be able to access loans. today, credit history or access by employers, landlords, utility companies, and ensures and making decisions on whom do higher rent to provide services to, etc. so not have a credit history could really hurt you. china's home to over 280000000 on bank systems to help address this issue. alibaba found a jack most famously declare that the banks won't change. we will change the banks of his words has sparked a renaissance in china's fintech industry, focused on lending and payments to maximize the economic potential of china and backed companies like we bank specialize in inclusive finance to provide loans to

low income individuals with no credit platforms. like all we pay and we chat, pay work as digital payment systems that is similar to a pseudo bank, allowing people to get paid and receive funds. so for this and more, let's bring in again, professor wisher wolf economist and founder of democracy at work. now, professor, in what ways can crypto currently serve as a potential solution to address the and bank crisis and how does it offer financial inclusion to those without traditional banking? well the, i have to be a little bit i hope to where it is and send that go, but i want to be honest with you. i don't think it makes much difference. i. the people who are on bank are not likely to become customers in the crypto system. i understand why that idea has been put forward. crypto currency is also a profit driven economic entity. it's a company wanting to make

a profit by creating and managing crypto currency, and there are many, many companies around the world doing that. i understand that they want to make a business, and they want to celebrate what they offer. like every business. that's what the industry called advertising is all about telling you reasons to go out and buy, you'll get this brand of soap because it will make you smell wonderful. right? so this is advertise in crypto currency advertises itself in 2 major ways. number one, it says, we are all now controlled by a highly concentrated banking system. fuel banks, again, i'll use the united states as an example. citibank, bank of america, jp morgan, chase, these monster banks, national banks,

they dominate and control the financial system. they are so rich sold, powerful that they control the government that's supposed to control them also. and in that situation, the average american citizen is a prisoner of these big private, profitable banks. so chris, so currency says, you don't have to be a prisoner, you can do your financial business, you know, but you don't have to put it in the bank. i remember the smaller regional banks have to put their money in the big urban bank. so in the end, it's the same people. so click the currency offers itself as the little person's by the way to escape the control of the big, monopolistic bags there. is there an element of truth here?

yes, yes, you are in a new different system that isn't regulated by the government so much i and that is independent of those big bags. and the 2nd advertisement is the on bank. look at all these millions of people. they don't want, they're afraid of these big buildings. they are abusively treated by these bags. they can't afford these expensive banks, so we will make it available to them cheaper. okay, this looks good. this sounds good. these are advertisements for crypto, but you know, crypto existed in the same capital of system. the banks to group though is a profit makes the enterprise, they don't want to be the bank for the poor for the bank because there's no profit in it. believe me, the big banks, you are all experimenting with crypto by the way, they're either buying a little trip the companies or they're creating their own. just in case it turns

out that there is a way to make profit from the poor they want in on it too. but that evidence is not there yet. and i'm very dubious that it ever will, in our system of any quality which is generated and reproduced by capitalism will decide which industry can make a profit. and which can, and the banks have long ago develop ways of understanding how to protect the monopoly they have a from anybody who comes along. and if crypto were able to capture a significant part of, of the credit business, the big bags will be right in there. buying them up and creating new competitors, more money in those competitors, they'll probably win the competition,

which is what happens in many other industries all the time. are there are risks of exacerbating inequality or creating new forms of financial exclusion through crypto currency adoption. and how can these risks be mitigated? yes, here's the sadness. because crypto currency goes outside of normal commercial banking. it is able to enjoy less regulation then the big bangs crypto currency is something new. crypto currency hasn't been tested for very long . and it took advantage of the fact that all banking regulations only apply to banks. if you don't call yourself a bank, well then you are free of regulation. why do i point that out?

because every financial criminal in the world is worried about regulation. banking has been an area in which criminals have been active from day one. and that's why there's so much regulation because the banks have committed every conceivable legal act they still do. in recent years, we have force bangs in this country to pay billions of dollars in punishment for a long during money from the drug business. for over charging. if you, if you overdraw your checking account for over charging you, when you exchange currency, you know, a euro to a dollar or whatever. it may constantly are doing this. and as a result, they have built up hostilities in world populations who respond to by demanding

that the government regulated and control banking. but the irony of all of this is that the more the government regulates the more incentive there is for the bank to control the regulators. we even have a name for that because it's so regular, it's called regular tory capture. it's when the, the people who should be regulated capture the regulate tours and that will be having them close the relationship between the government and the big businesses, which has happened everywhere. in any case, it's more difficult if you are a financial criminal. you have all the regulation crypto currency has very much less regulation even now. and so the criminal c is an opportunity in the crypto area that they don't see elsewhere. why am i explaining?

because that's where a lot of the criminals have gone. we've had spectacular legal processes in the last 6 months in which people lost billions of dollars. we're forced to go to trial and had been exposed as having perform one or another criminal act. and lots of people lost a lot of money in the crypto 3, and i know some people made a lot of money, but you have to balance out against the people who lost a lot of money because of the lower level of regulation, invites of criminals to make an effort and so the sad reality is that the grip those sector has become a place of criminals. partly because they can escape, they don't want to be in the public regular banking sector because the government is looking, you know, there's laws,

for example. you can't move more than $5000.00 in and out of an account without the bank letting the government know that the own juwan moved $5000.00 to mary. jo, it's nobody's business. it's not a legal but the bank is watching. and if this account, if you move the lot of money in an account that normally moves $50.00 or a $100.00 a $200.00, who knows what investigation they will now undertake. so that means all kinds of people who are doing all kinds of either illegal or send me legal or maybe just on ethical things are loading up in the print. those academic and that means it's very unsafe, is means it's very unsure. so the very idea of going to crypto to escape, capitalism doesn't work because capitalism finds

a way to make money or try to in the grip those sector. so it becomes a place of more than your average financial criminal being active. and you can become a victim, as many people have of that situation. so i, that's another reason why i don't think it's a solution at all. and the more these criminals get caught, the more people are hesitant, the less profit they'll be, the fewer of them will be less. and either the idea will disappear, or a handful of companies will dominated. and my guess is they will be owned by the bank of america citibank, wells fargo, and you will be back to have this conversation 10 years from now, and it will be the same conversation. thank you so much, professor. well, for all your time today. when talking about the on bank, many agree that the crypt occurs. the market has taken up the role of addressing

financial inclusion. not only is it a tool that allows any individual to bank themselves by bypassing the need for a traditional bank account. it allows the individual to build wealth crypto currencies offer on bank populations, a mechanism for making transactions and send remittances back home without expensive fees. oh, salvador has a 70 percent on bank population where a quarter of the working population lives in the us where they've then send payments back to their families. crypto payments would drastically reduce cross border fees, and that's a require families to have a home address or id documents which many lower income people lack to. el salvador had made the news last year as a 1st country to make big queen legal tender. other emerging markets are likely to follow with the primary motivation to weaken their dependents on the us dollar, which makes some vulnerable to fluctuations between the greenback and domestic currency. i'm christy,

i. thanks for watching and we'll see you right back here next time on the cost of everything. the, the, [000:00:00;00]

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