Sector Overview: Financials

Investment Themes in Financials

Financial Inclusion

Financial inclusion represents a key driver for economic growth across Emerging Markets (EM). From the micro side, it empowers individuals and companies to establish credit, borrow, and invest. On the macro side, it formalizes economies, improves tax collections, may reduce fiscal deficits, and it improves country credit profiles.

Only 63% of adults in emerging countries have a bank account either at a financial institution or through a mobile money provider, compared to 94% of adults in developed markets[1]. This represents a considerable catch-up opportunity as governments use technology to push their citizens into the formal economy.

Coming out of the COVID-19 pandemic, regulators in many EM countries prioritize financial inclusion to tackle inequality and drive economic growth. Policy momentum presents an opportunity for leading banks in emerging market countries in the near term. Additionally, they will likely benefit from the longer-term perspective of solid demographics and low credit penetration.

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Financial Digitization

Beyond the apparent structural opportunity, banks in EM have a substantial opportunity to improve earnings as they replace their physical footprints with digital platforms. The adoption of digital payments is growing rapidly, fueled by government policies, the need for financial inclusion, and the fast-growing number of internet and smartphone users. Two-thirds of unbanked adults have a mobile phone . Mobilization has created new opportunities for providing financial services in emerging countries[2].

Financial digitization not only cuts costs, it also helps collect data, improve decision making, reduce non-performing loans, boost cross-sell of profitable products, and lowers the traditional barriers to entry for new financial market players.

Industry Highlight: Insurance

Financial inclusion and digitization along with rising income, growing middle class and an ageing population present huge opportunities for insurance and asset management companies in Asia. More than a third of population in Asia would be above 50 years of age by 2030 (from nearly a fifth now)[3]. Insurance penetration remains very low across most Asian countries with huge protection gap estimated at US$49 trillion translating into new annual life premiums of US$145 billion. China and India remain the most underpenetrated markets with only 8-12% of the countries’ insurance needs covered.

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For investors, financial inclusion & digitization create attractive long-term investment opportunities based on both secular growth and idiosyncratic developments across financials, technology, housing, healthcare, retail, and education sectors. Identifying these developments requires the scrutiny, presence, and experience of an active, bottom-up manager like Mirae Asset.


[1] World Bank Group, “The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution.

[2] Global Findex database, Gallup World Poll, 2017

[3] United Nations, Department of Economic and Social Affairs, Population Division (2019). World Population Prospects 2019.



Gross Domestic Product (GDP) is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.

The views and information discussed in this brochure are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation.

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