World's best bank for financial inclusion 2017: Citi

There are an estimated 2 billion people in the world that are unbanked. Thanks to thousands of micro-finance institutions working to reach these populations and the advent of mobile technology allowing access to payments in even the most remote of areas, that number has stopped growing. Through collaborations between banks, micro-finance groups, mobile operators and multinationals, the number can begin to come down. 

“Ultimately, the solution is not a monoline one,” says Bob Annibale, global director of Citi Community Development and Citi Inclusive Finance. He has spearheaded much of Citi’s work in financial inclusion since 2005 – although Citi has been directly and indirectly helping to grow banking in the emerging markets it operates in for well over 100 years.

Through its businesses and foundation, the bank has sought to provide solutions for the world’s unbanked by bringing together different players to have a larger, scalable impact. Citi is the winner of Euromoney’s inaugural award for world’s best bank for financial inclusion. 

Perhaps the greatest example of Citi’s collaborative work is in Mexico. Through its Mexican subsidiary Banamex (rebranded last year as Citibanamex), it teamed up with mobile operator América Móvil and convenience store chain OXXO to create the Transfer account that people can create and use via their phone or in one of OXXO’s 15,000 stores. By the end of this year, some 6.5 million Mexicans will have set up a Transfer account – 85% of whom did not have a bank account previously. 

“We’re onboarding on average 10,000 new customers in Mexico every day,” says Annibale. “How? Because there are multiple solutions that have been brought together so that banking has been made more accessible to a large number of the population.”

Elsewhere in Latin America, where Citi does not have a retail presence, the bank has also been using partnerships to indirectly improve financial inclusion. Citi Inclusive Finance works with fintechs and startups to find solutions for the unbanked. 

In Peru, in partnership with Citi Latin America, the unit developed the capability for Citi’s corporate clients to collect funds via text message when delivering to small store owners who are often unbanked. Working with microfinance institutions in the country, the store owners receive a line of credit that Citi processes and settles upon distribution. Citi’s corporate clients benefit from reduced risks and costs of collecting payments, while the store owners gain access to working capital and are no longer at risk from storing cash. 

“We consider ourselves the bank to the bank to the poor,” says Annibale. It is a sentiment echoed by Citi’s chief executive, Mike Corbat. He points out that Citi is also one of the world’s largest movers of money to help microfinance institutions by offering them access to Citi’s payment systems – such as its partnership with OneAcre Fund in Kenya to provide a digital payment solution to rural farmers, helping them boost their earnings by 50%. The bank also signed an agreement with the Philippines-based Asian Development Bank last October to facilitate up to $100 million of local currency loans to microfinance institutions in the Asia-Pacific region. 

“Whether it’s through the business or through Citi Foundation, we can help banks and microfinance institutions go that last mile so they can better serve and reach the unbanked,” says Corbat. Some of that help is also providing solutions and ideas, in addition to financing, such as Citi India’s suggestions about financial access for the underserved that were implemented by the government of India. 

As Corbat points out, Citi’s help does not have to be particularly complex. Last year in the US, for example, Citi opened its ATMs to credit unions and minority-owned banks, allowing access to 300,000 clients. The bank also partners with Grameen in America, providing Grameen’s low-income clients with a free Citi savings account. 

“Economies and societies need banks of all sizes, and we’ve looked to see what we can do that could empower those that are part of this ecosystem around the world,” says Corbat. “It’s all a continuum – the large corporates we serve sell to small and medium-sized businesses that are supported by communities.” Citi offers financial education and micro-entrepreneurial awards in those communities. 

What Citi has done, however, is also prove that serving the underbanked is positive for business – that it is in a large bank’s interest to help reduce financial exclusion. Citi’s Access account, for example, was launched in 2014 with the US’s unbanked and underbanked in mind (of which there are 15 million), yet it is now the fastest-growing checking account at the bank.