Challenger banks are potential game-changers in raising the levels of financial inclusion in the emerging economies of Africa and Asia. They exploit digital technology – in particular the smartphone – to increase the penetration of financial products and services in remote areas. The uptake of general-purpose technologies such as smartphones and internet connection could have a significant impact on global poverty.

According to the guidelines set out in the Bill and Melinda Gates Foundation’s financial inclusion initiatives, traditional financial organisations do not adequately serve the poor rural communities in emerging economies. In fact, in the eight vast and largely undeveloped countries – Bangladesh, Ethiopia, Indonesia, Kenya, Nigeria, Pakistan, Tanzania and Uganda – covered in a recent CREST International white paper, Challenger banks, microfinance and the cyber security landscape: the future of financial inclusion in Africa and Asia?, banks are...