The promise of banking the unbanked is no longer a slogan—it’s an execution challenge with measurable upside. With the right counterparties, data, and operating model, banks can reach new customers profitably while meeting the risk standards supervisors expect. Our job at Pipworth Partners is to translate inclusion into bankable flows, so financial institutions can scale this opportunity confidently.
Table of Contents
Why Banking the Unbanked Is a Now Problem
The numbers have moved in the right direction, but the gap is still material. The World Bank’s Global Findex shows account ownership climbed to about three-quarters of adults worldwide, yet roughly 1.4 billion people remain outside the formal system. That’s a growth market hiding in plain sight for banks that can price, monitor, and service these customers well. World Bank+1
At the same time, inclusion infrastructure is maturing. Brazil’s Pix emerged as the most used non-cash payment instrument by late 2024, and India’s UPI is a low-cost, real-time scheme designed from day one for scale on mobile. Real-time rails don’t solve inclusion alone, but they crush frictions that kept low-value, high-frequency customers on cash. Banco Central do BrasilNPCI
Finally, the growth of mobile money and wallet ecosystems continues to broaden usage of formal accounts in many markets. That means banking the unbanked increasingly looks like connecting to the rails people already use rather than forcing them onto legacy channels. (Here is an excellent resource from GSMA: https://www.gsma.com/solutions-and-impact/connectivity-for-good/mobile-for-development/gsma_resources/state-of-the-industry-report-on-mobile-money-2024/). GSMA
The Real Barriers (and Why They’re Fixable)
The obstacles are well-known: thin or inconsistent identity data, perceived AML/CFT risk, and expensive last-mile servicing. None are insurmountable. Digital identification programs are expanding, risk-based expectations are clearer than ever, and instant domestic rails shrink unit costs. The work is to choreograph policy, product, and partners so new customers are selectable under bank standards. Banking the unbanked becomes a control design challenge, not a leap of faith. FATF
Banking the Unbanked: The Operating Model That Works
Banking the unbanked at scale needs a bank-grade operating model that is simple to explain and hard to break. We build it with clients in five layers.
1) Risk story first, product story second.
Describe who you will serve, how funds flow, what corridors you’ll use, and how each risk is mitigated. Supervisors care about the architecture more than the marketing. Keep it one page, then point to evidence.
2) Segmentation you can defend.
Define micro-segments based on income source, corridor, device, and transaction behavior. Set differentiated thresholds and monitoring rules per micro-segment so low-value flows get light-touch reviews and higher-risk patterns get deeper checks.
3) Pre-validation at the edge.
Validate identity, account formats, and device hygiene before you create risk. Pre-valid beneficiaries and structured references reduce repairs downstream and drive straight-through processing on real-time rails.
4) Liquidity without guesswork.
Model predictable inflows and outflows by hour and corridor. Buffer your Nostros where the day-of-week and holiday calendar say you’ll need it most. The best “speed story” is one where you never miss a cut-off.
5) Proof, not promises.
Package a banker-ready data room: policy-to-control maps, sanctions and alert logs, sample case files, and QA/tuning memos. When the evidence is orderly, onboarding accelerates—and refresh cycles don’t become crises.
Digital Public Infrastructure: Rails That Reduce Risk
Digital public infrastructure (DPI) is not a buzzword; it’s how we shrink unit costs and increase observability. Pix in Brazil shows how instant rails can become the dominant non-cash instrument, and UPI demonstrates how a single, interoperable interface can unify banks and fintechs at scale. For banks, the payoff is cheaper acquisition, richer data, and faster exception handling—core ingredients of banking the unbanked safely. Banco Central do BrasilNPCI
These rails aren’t magic. They need structured data and clean onboarding to avoid investigations that stall credits. But when control and format are right, DPI turns “unbankable” customers into customers you can underwrite with eyes open.
Data & Identity: Banking the Unbanked With Trust at the Core
Identity is the front door. The World Bank’s ID4D initiative tracks progress on legal identity and digital ID features, showing both expansion and remaining gaps. Where robust ID is present, onboarding costs fall and false positives shrink. Where it’s thin, you can still proceed—by layering verifiable credentials, reliable alternative data, and strong consented device signals, then calibrating risk thresholds per micro-segment. id4d.worldbank.org+1
In markets with ID constraints, banking the unbanked works best when banks rely on structured third-party checks without outsourcing accountability. That balance—reliance with responsibility—is exactly what supervisors expect.
Compliance, Not Compromise: The Risk-Based Way
The risk-based approach is not optional—it is the standard. FATF’s guidance clarifies that de-risking entire categories is poor practice; firms should assess risk case-by-case and apply controls proportionately. For banks, this is liberating: you can bank higher-risk segments if you can show credible mitigation and ongoing monitoring. That is the real backbone of banking the unbanked in 2025. FATF+1
Reality check: fintech alone is not a universal fix. IMF research finds that while digital tools reduce frictions, inclusion results vary by country and instrument. Translation: assemble the right bundle—policy, product, partner—not tech in isolation. IMF
Correspondent Access: Re-Opening the Last Mile
Many “unbanked” communities are also “under-connected” to cross-border rails thanks to the long decline in correspondent relationships. The BIS has documented this trend and is exploring next-generation models—from tokenised pre-screening to atomic settlement—that could reopen thin corridors. Until then, banking the unbanked requires careful partner selection and documented flows that correspondent banks can underwrite. Bank for International Settlements+1
This is where a curated network matters. The introducer’s role is not to “shop around” but to align flows and controls to institutions whose appetites and capabilities match your reality.
Use Cases That Prove the Thesis
G2P to account.
When government-to-person transfers land in regulated accounts on instant rails, onboarding soars and cash-out costs fall. Combine robust ID checks with real-time anomaly detection and you can scale with confidence.
Remittances into wallets—and from wallets into bank accounts.
Inbound corridors often begin in wallets. If you enable compliant wallet-to-account bridges, families get faster access to funds and banks gain visibility into stable inflows that support savings and credit.
Micro-merchants and gig-economy earners.
Daily low-value credits accumulate into meaningful balances over time. With structured metadata, banks can score earnings smoothness and offer credit that reflects real volatility, not blunt assumptions.
Community savings and SME ecosystems.
Digitising group savings with clear KYC reduces cash handling and sharpens transaction narratives. Banks can extend working capital based on observed cash flow, not just collateral history.
Each use case is an on-ramp to banking the unbanked when the rails, identity, and compliance story lock together.
Metrics That Matter to Your Board
Boards don’t buy slogans; they buy control evidence and unit economics. Track end-to-end onboarding time, structured-data completeness, sanctions false-positive rates by micro-segment, alert aging, and the percentage of eligible payments that settle on instant domestic rails. Layer in customer-level retention, funded-account activity, and deposit stability. When those indicators trend the right way, banking the unbanked moves from pilot to portfolio.
A 90-Day Plan to Start Banking the Unbanked
Days 1–15: Frame and evidence.
Write a one-page risk appetite statement for inclusion segments. Map funds flows for two starter use cases and document controls per step. Stand up a small “no-surprise” data room: ownership charts, policy-to-control links, sample screening logs, and anonymised case files.
Days 16–30: Choose the rails and route.
Pick one domestic instant rail and one wallet ecosystem that your customers already use. Implement structured fields end-to-end so references never become free text. Pre-validate beneficiaries to kill repairs before they start. For India and Brazil, for example, make UPI and Pix integration first-class, with corridor-specific playbooks. NPCIBanco Central do Brasil
Days 31–60: Calibrate risk and liquidity.
Create micro-segments with differentiated thresholds. Time list updates and triage flows around cut-offs to avoid queue spikes. Model Nostro buffers by corridor and day-of-week; don’t rely on global averages. Publish tuning memos so reviewers see a living system.
Days 61–90: Test, attest, and scale.
Run a go-live drill with synthetic data, then limited real flows. Track SLA hits, exception counts, and first-funds settlement speeds. Invite an independent reviewer to sample your cases and controls. That single external attestation often unlocks faster approvals for expansion.
How Pipworth Partners Bridges the Gap
Our mandate is simple: make banking the unbanked safe, fast, and economically rational for financial institutions. We operate at the intersection of trust, strategy, and performance—curating the right counterparties, crafting banker-ready dossiers, and staying in the trench until first funds settle. To understand the team behind these strategies, learn more about Pipworth Partners: https://pipworth-partners.com/about-us/
We don’t disappear after an introduction. We set weekly risk/ops syncs through go-live, tune screening queues, validate reconciliation logic, and refine route selection as volumes build. If you’re ready to turn intent into measurable inclusion at scale, speak with us here: https://pipworth-partners.com/contact-us/
When banks can see the risk, price it, and prove control, inclusion stops being a CSR talking point and becomes a growth engine. With curated partners, structured data, and a risk-based operating model, banking the unbanked is simply good banking. Pipworth Partners exists to make that future arrive on schedule.
