We’ve grown accustomed to everyone having a banking account and relying on financial services such as loans and credit cards. It might come as a surprise to you that there are people out there labeled as “unbanked” – meaning that they have no affiliation with the modern banking systems. They operate strictly by using cash payments or using one-time banking services.
We’re here to discuss the concept of “unbanked” people globally and in Turkey specifically and how Dr. Ozan Ozerk and his innovative fintech app, Ozan, tie into the entire thing.
The Global State of Things
Before Ozan started working on his fintech app, he took a look at the global state of things when it came to banking. We can safely say that unbanked people are relatively rare in the countries that we now call the western world. In the rest of the world, things are a bit different.
When we take a look at the percentages of banked citizens, we realize there is quite a bit of room for expansion:
- China: 13%
- India: 11%
- Indonesia: 6%
- Pakistan: 6%
- Nigeria: 4%
- Mexico: 3%
- Bangladesh: 3%
Sure Turkey is nowhere to be found on this list, and the percentage of unbanked citizens is estimated to be around a quarter of the population. Still, some citizens don’t use banking services regularly despite having checking and bank accounts. Ozan realized that they often opt to use alternative financial services (AFL) and that these were classified as “underbanked” citizens.
Ozan Ozerk realized a whole untapped economic layer of Turkish society that could benefit from alternative financial solutions like fintech. However, there were still a few obstacles in the way.
eCommerce and Turkey
Ozan saw an opportunity to tap into this market in early 2000, when Turkey started opening up new tech and business models. Basically, Turkey started modernizing its economy quite late compared to other countries, which negatively impacted its financial stability as it was lagging compared to the rest of the world.
Luckily, once e-commerce started growing, it expanded rather quickly, making a killing in 2019. In just one year, it grew to an astonishing $13.03 billion and continues to grow. Dr. Ozan Ozerk’s app is benefiting from this growth.
The reason why e-commerce and e-payment systems took so much time to develop has a lot to do with the laws that are in place. It took some time for Turkey to adapt to the new regulations and grow its internet penetration. They let the EU take the lead and then adopted a set of laws aligned to the one’s practices by EU states. From this point onward, fintech and e-commerce businesses could start operating in Turkey, and Ozan made his move.
The process for getting licensed in Turkey for this kind of business isn’t what you would call quick. Suppose you want to open a business in this niche. In that case, you should look at “the Regulation on Payment Services and Electronic Money Issuance and Payment Institutions introduced by the Banking Regulation Supervision Agency.” With a lengthy name, this law holds all the information you need to pass the regulatory requirements and open for business.
Why It’s Important for Turkey and How to Breach the Barrier
Turkey’s economy has been growing among the fastest in the world in the last decade, and this isn’t something only Ozan Ozerk noticed. The demand from the growing e-commerce trend is also increasing the expectations from the country’s fintechs.
According to Dr. Ozan Ozerk, any country’s economy can benefit from AFS, open e-commerce, and e-money regulations. Let’s take a look at these benefits:
- Boosted revenue for financial institutions, which can grow and further contribute to a countries economy;
- Eliminates the need to physically go to banks to gain access to banking services;
- Improves opportunity creation for the emerging middle class;
- Helps break the cycle of poverty by providing cheap financial services for the poor;
- Establishes connections between emerging markets that would have no way to interact if not for AFS;
These were the primary motivational factors and indicators to Ozan Ozerk that it was the right move to create the Ozan app. These are also the factors that impacted its tremendous success with users and quick establishing of the Turkish financial technology solution.
How to Reach the Unbanked and Underbanked
We asked Ozan Ozerk about the difficulties that he faced reaching this part of the population. After all, if they didn’t want anything to do with financial institutions so far, it’s unlikely they’ll change their mind, right?
Well, according to the experiences of the team behind Ozan, there are a few things you can do:
- Focusing on financial education;
- Start them off with a prepaid option;
- Mobile solutions are key;
- Identify and bridge enter barriers;
Of course, good marketing and pristine customer relations are a must when dealing with unbanked customers. This means that you must educate from the get-go and strive to eliminate confusion at every step. If they find anything fishy throughout the use of your services, they might abandon it for good.
Establishing trust between the users and your brand is essential for success in this situation. Still, once you establish this trust, you will have very loyal users who don’t like switching between service providers as they feel they’ve found somebody that they can rely on.
Well, that’s about it. We tried to guide you through Ozan’s process to reach success and share some first-hand experience from a successful brand. Remember, the unbanked users are still there for the taking if you can earn their trust. We wish you luck.
Ozan Limited (trading as Ozan) is a company incorporated in England (company number 09561722) with registered address at The Bower, 207-211 Old Street, London, England, EC1V 9NR. Ozan Limited is authorised by the Financial Conduct Authority in the United Kingdom under the Electronic Money Regulations 2011 (FRN 900482) for the issuance of electronic money.