Australia ranks 7th in financial inclusion index

Oksana Patron

28 October 2022

Australia has been ranked as the seventh most financially inclusive markets out of 42 global economies, according to the inaugural Principal Financial Group’s Global Financial Inclusion Index.

The study, conducted by the Centre for Economics and Business Research, looked at how respective government, financial systems and employers provided relevant tools, services and guidance to enable greater financial inclusion.

Australia also ranked second for financial system support, a category which looked at the availability of various financial products and services as well as education, access to bank accounts and credit, maturation of financial technology and user of real time-time payments, among other things, and it ranked 10^th for government support, a pillar which examined the degree to which governments promoted and enabled financial inclusion.

However, the country secured only 31th place in the overall ranking of 42 markets for its employer support, a category which takes into account the availability and impact of employer programs aimed at improving employee financial wellbeing and inclusion across various dimensions.

The index also confirmed that developed economies tended to rank at the higher end of the index, with six of the top 10 markets for financial inclusion being European countries, including four Nordic.

However, Europe’s largest economies secured lower positions of the ranking, with Italy being a particular outlier at 37^th.

Following this, the lower half of the rankings consisted mainly of countries in Latin America, sub-Saharan Africa, and Asia, with Argentina raking last.

The research also found that economies providing strong support from their government and financial system tended to provide a lower level of employer support and stressed the importance of financial inclusion as a powerful indicator of next generation capital and wealth markets.

“When performance in each pillar is strong, it helps promote business growth and confidence and may lead to accelerated development of a capital market. These three pillars can provide insights into its overall economic maturity and development of a market and suggest ways to drive progress,” the research read.

Unsurprisingly, markets which ranked highly for financial inclusion tended to also perform well on other societal factors such as food security, productivity, economic and social resilience, standards of living, and climate change adaption.