7. Leapfrogging Banks in Emerging Markets

In this chapter, we discuss the challenges for the 2 billion people who lack access to financial services in developing and developed economies. We examine how developing economies have embraced alternative financial services, in many cases bypassing traditional banks, and how lives and the economy in some countries have been transformed where these services are available. We present how these services can act as a gateway to inclusion in the traditional financial system, and how they are evolving as a valid alternative. We discuss the challenges of regulation, interoperability and usability and how overcoming these barriers will enable them to scale to supplant traditional banking in developed as well as developing economies.