Financial inclusion is crucial for fostering economic growth and strengthening the EU Single Market. By ensuring that all citizens have access to essential financial services, it helps unlock opportunities for consumers and small businesses, driving entrepreneurship, job creation, and innovation. In a highly competitive and increasingly digital economy, financial inclusion supports the development of innovative and affordable financial solutions, making it easier for consumers to participate in the economy, manage their finances, and build long-term security.
Financial inclusion promotes social cohesion by addressing disparities in access to services, particularly for vulnerable populations such as low-income groups, rural residents, and the elderly. As the EU aims to build a resilient and sustainable economy, ensuring broad access to financial services contributes to reducing inequality and supporting economic participation across all regions, further aligning with EU goals of fairness, growth, and integration.
A key element of financial inclusion is the right to access and control one's financial data. The Financial Data Access Regulation (FIDA), currently under discussion in the Council of the EU and the European Parliament, is a critical step in this direction. FIDA aims to give individuals easier and more secure access to their financial data, allowing them to share it with different financial service providers. This will enable consumers to switch banks or try new financial apps with ease, ensuring they receive personalized services and better deals. By facilitating data portability, FIDA empowers people to make informed financial decisions and enhances competition among financial service providers.
For example, under FIDA, consumers could benefit from personalized insurance tools that help manage risks more effectively. By enabling better-targeted products and valuable advice, FIDA contributes to more optimal financial solutions, particularly for underserved communities and ultimately leads to increased financial inclusion.
Financial literacy is crucial for informed decision-making and therefore improved financial inclusion. The EU has made financial literacy a priority action in its 2020 capital markets union action plan and actively promotes financial literacy across member states, helping citizens understand budgeting, saving, investing, and responsible credit use. By working with national authorities, the European Commission aims to create effective financial education programs, ensuring that all citizens, from young people to adults, are equipped with the knowledge to manage their finances wisely.
The digital transformation of financial services is another key focus area for financial inclusion. The EU is committed to making digital financial services accessible to everyone, ensuring that even those who are not tech-savvy can benefit. In the EU, through relevant initiatives like the “Digital Finance Strategy for the EU” there’s a strong push to ensure that digital financial services are available to everyone, not just those who are already tech-savvy. The goal is to provide user-friendly digital solutions that cater to all citizens.
The EU also works to eliminate barriers faced by marginalized communities, such as low-income individuals, migrants, and the elderly. By promoting inclusive financial practices, the EU aims to ensure that everyone can access the financial services they need, regardless of their background or circumstances. This includes offering simplified financial products, services in multiple languages, and eliminating discriminatory practices.
Financial inclusion is a powerful tool for empowering individuals and fostering economic growth. Through initiatives like FIDA, increasing financial literacy, and promoting digital and inclusive financial services, the EU is working to create a financial system that benefits everyone. This approach not only could improve individual lives but also creates a more competitive and innovative financial landscape for businesses.
At Insurely, we actively support financial inclusion and FIDA objectives by promoting consumer awareness and control over personal financial data. By leveraging open finance principles, we empower our partners to give consumers the tools needed to make informed decisions, fostering greater transparency and broadening access to essential financial services. This increased data control not only enhances trust in financial systems and services but also drives more equitable participation in the financial landscape, contributing to overall economic inclusion.