Empowering the Unbanked: How Blockchain Technology Serves Billions Left Out of Traditional Finance

Over a billion people worldwide lack access to basic financial services, particularly in developing countries — but these emerging markets, neglected by traditional financial systems, hold immense potential for those offering an alternative approach. Agne Linge, Head of Growth at WeFi, the world’s first non-custodial neobank, explains how blockchain technology, merged with AI, brings financial power back to the people through self-custody, algorithmic identification, and instant remittances.

1. Billions of people remain unbanked globally. Why did banks fail to create conditions allowing the underbanked to access them? Shouldn’t serving all these people bring considerable profits to banks? 

The reality is that over 1.5 billion people around the world are still unbanked, mostly in regions like South Asia, Latin America, Africa, and the Middle East. Traditional financial systems were built to serve customers who bring profits, often focusing on wealthy Western nations while sidelining others. The current banking model prioritizes profit over accessibility, catering to those who fit into the existing framework — like people with stable corporate jobs who can take out loans, mortgages, and credit. 

Traditional banks have high overheads that include staff, physical offices, and other operational costs. To maximize the profits for the shareholders, the banks look at the most profitable segments that they can serve — like high-net-worth individuals in the USA, Canada, Western Europe, the Middle East, Hong Kong, and Singapore. This customer segment brings the most profit to the banks due to the services that they offer — loans, credit cards, wealth management, and investment advice, for which they can charge good fees. 

The reality in the developing world is different. The banking sector hasn’t found it profitable enough to extend services to many communities in emerging regions, even though these people are just as industrious. Serving low-income populations with relatively small transaction sizes is unattractive for traditional banks. A few other factors make serving them even more difficult. One of them is physical inaccessibility: most of the unbanked population lives in rural areas, and it takes them a very long time to reach a city with the infrastructure that we are all used to. Another one is the lack of proper identification documents. 

People in the developing world — farmers, small business owners, or service providers — work hard but don’t fit neatly into the banking system’s predefined criteria, often because they lack the type of documentation that banks require. Despite their wealth in assets or their strong community-based borrowing and lending practices, they’re left out of the system. It’s a missed opportunity for banks and also for the economic growth that could come from including everyone.

2. If the issue with paper IDs restrains people’s access to banks, is it possible to go beyond and devise new solutions that would simplify their onboarding? What could those solutions be like?

Advances in technology, combined with the vast amount of data we produce, have enabled us to identify individuals without traditional paper IDs. Today, we have technologies that can recognize a person by their unique characteristics — like their body movement or even just by looking at a camera to scan their iris, as seen in some of the world’s airports.

At WeFi, we are implementing Artificial Intelligence solutions that can identify individuals and offer them tailored products and services. Identification can be done through biometric details such as fingerprints or iris scans, but it can also be based on behavior — like online activity, social media engagement, or mobile phone payment history. This approach has the potential to bring financial inclusion to those who have been left out of the traditional banking system, making services accessible to everyone, regardless of their background or documentation.

3. Since opening an account in a conventional bank is so difficult, do alternative platforms like remittance services cover people’s needs?

To some extent, they do; however, there are a plethora of services that people could benefit from with the opportunities that today’s advanced technology brings. Most alternative platforms offer remittance services, which are so important for people who travel across the world to earn money to support their loved ones. But this is only part of the story — many people still lack access to financing for their small businesses, insurance services, basic accounts, or secure ways to store their funds. Addressing these needs is crucial for true financial inclusion and for unlocking the economic potential of these communities.

Some financial services have been introduced to provide financing opportunities for small businesses, like farming. However, these services often focus more on extracting funds through high interest rates typically associated with microfinancing, rather than genuinely supporting these communities. 

WeFi’s mission is to offer financial solutions to empower people, provide financial literacy, and enable them to take part in this global interconnected ecosystem.

4. Stablecoins have democratized people’s access to financial services and are widely used for cross-border peer-to-peer payments. To what extent have they solved the remittance problem?

The birth of stablecoins came with the nascence of blockchain, and the initial purpose of stablecoins was for traders to balance their books without exiting the blockchain ecosystem. Today, we are witnessing the increasing development and issuance of stablecoins by well-known FinTech institutions such as Revolut, Stripe, Ripple, and even Visa has launched a platform to help banks issue stablecoins. 

This development is very interesting to observe, as it seems that we are entering — or coming back to — the era of private money. It was once believed that only governments could issue money. In reality, commercial banks have also been increasing the money supply by issuing loans and mortgages through the practice of fractional reserve banking.

Today, the landscape is rapidly changing, and some countries are developing digital currencies called CBDCs (Central Bank Digital Currencies). Very soon, the Europeans will be using Digital Euro, Americans – Digital Dollar, and so on. 

The development of the stablecoin ecosystem does not only solve the remittance problem — this is completely changing the landscape and interaction between financial flows.

5. At WeFi, you’re building a non-custodial neobank where money is stored on the blockchain. What are the perks of this approach, especially for people in developing countries? Doesn’t it add complexity, potentially limiting the adoption of such a product by a mass audience?

WeFi is building a non-custodial bank, which means that a person is always in control of their own funds. In fact, there is no money stored on the blockchain – blockchain is a decentralized database that contains information about certain data, which can be the amount of funds. Having self-custody of funds means that an individual holds the ‘key’ to access and control their assets, deciding independently how the money will be used or spent.

At WeFi, our mission is to make new technologies accessible to a mass audience by creating an easy-to-use product that simplifies, rather than complicates, people’s everyday lives. It’s a challenging goal, but our team is determined to succeed. With extensive experience in FinTech, blockchain, stablecoin creation, and a deep understanding of developing countries, the WeFi team is well-equipped to deliver a truly transformative product.

6. Right before our eyes, global fintech is becoming increasingly digital and mobile-first, with neobanks spearheading this trend. What role does blockchain play in this evolution? Will global banking become blockchain-first in the foreseeable future?

Today, the global population stands at 8.2 billion. According to Statista, the number of mobile phone users in 2024 is expected to reach 7.49 billion. This means that nearly all adults worldwide are using mobile phones, representing a significant shift in access to the global digital economy.

Many people in the developing world lack banking access not only due to insufficient documentation but also because they live in remote rural areas, deserts, or rainforests, far from any financial centers. Mobile phones have dramatically changed this situation. We must now adapt our financial offerings to take advantage of the opportunities created by widespread mobile phone and internet adoption, which is where neobanks like WeFi come into play.

Blockchain is a technology that enables the storage and transmission of data globally over the Internet. There is no need to visit a physical bank branch that stores paper documentation, which is vulnerable to fire or water damage. With blockchain, data transmission doesn’t require intermediaries or physical branches — all you need is a mobile phone with internet access. 

Whether global banking will become blockchain-first in the foreseeable future is a question, since many of the banking incumbents try to resist the blockchain revolution as it drastically reduces the value of their existing operations. This notwithstanding, the new technology generation has arrived, and we, visionaries, are here to drive things forward for a better future.