“Financial inclusion,” defined as individuals and businesses having access to useful and affordable financial products, has declined in the U.S., according to new industry research.
The US dropped from second to fourth place in this year’s second annual survey Global Financial Inclusion Index Compiled by the Center for Economics and Business Research in London and the Des Moines, Iowa-based President Financial Group. Singapore continued to maintain its top position.
According to the research, which examined 42 markets around the world, Singapore is followed by Hong Kong, Switzerland, the USA and Sweden in the 2023 rankings. Singapore’s small size, with a population of just six million, helps it rank, but it is also powered by its commitment to financial literacy, financial technology adoption and employer support.
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A country’s employers, financial systems, and governments are key elements that make a system inclusive, which in turn influences consumer sentiment.
In the US, consumer sentiment is declining across financial systems and employers, but it’s especially pronounced when it comes to government. The percentage of people who think the government is acting to help them feel financially included dropped from 72 percent in 2022 to 50 percent in 2023. Political polarization, evident in developments such as the recent threat of a federal shutdown, further exacerbates the situation. .
“This creates uncertainty and causes people to postpone savings-related purchasing decisions they might otherwise make, and you don’t want to paralyze people’s decision-making around financial security,” Financial Group President and CEO Dan Houston told CNBC. An exclusive interview.