OREANDA-NEWS. The Bank of Russia completed the second annual assessment of financial inclusion indicators to sum up 2015 results and compare them with last year statistics.

According to the data posted on the regulator’s website, there is a growth trend in the number of point-of-sale terminals installed in commercial/servicing organisations (by 15.7%). Also, we see a growth in the number of household accounts (by 5.2%), of accounts opened for legal entities (which are not credit institutions), and for individual entrepreneurs (by 1.1%) that can be used for payments.

The development of remote and digital financial services is viewed as an alternative to the expansion of financial organisations’ branch networks which aim is to reduce costs and to create for their users more convenient financial inclusion channels regardless of their place of residence or location. In 2015, the share of adults who use Internet banking and/or mobile banking to transfer money grew from 19.6% to 23.7%. The same is true about small and medium businesses (growth from 68% to 74.6%).

In Russia, the mobile network enjoys the status of a most developed infrastructure system. Mobile phones are used for payments and for consumers’ identification in some cases. Through SMS-messages customers can track down their bank card and e-wallet operations and prevent non-authorised transactions. No wonder that a share of adults who use their mobile phones to transfer money grew in 2015 from 16.7% to 20.7%.

In this context a physical financial infrastructure presence kept narrowing. For example, a number of operating units of credit institutions reduced by 4.1% in 2014, and by 11.2% in 2015. The year 2015 also witnessed a reduction of insurance entities (by 15.7%), of microfinance organisations (by 12.2%), of credit consumer cooperatives (by 1.3%), as well as of ATMs and of payment terminals of credit institutions (by 6.6% and 10% respectively). At the same time, at year-end 2015, two biggest Russian cities (just 0.02% of the territory of Russia) accounted for 14% of overall operating units of credit institutions and 18.2% of ATMs. Only the number of pawn shops grew (by 8%). One needs to mention that the shrinkage of non-credit financial institutions is primarily explained by striking off from the state register of those companies which fail to submit their reports or seriously violate legislation while performing their activities.

It is noteworthy to mention that according to the research data of the International Monetary Fund, at year-end 2014, Russia takes a global top position (outrunning among others some G7 and BRICS countries) in terms of operating units of credit institutions per 100,000 adults over 18.

Although mass media still prefers to show its distrust in financial institutions rather than to give friendly information, a general level of trust among financial market participants is on the rise against the regulatory policy and legislative novations aimed at securing consumers’ rights. For example, a share of the population mistrustful of banks fell from 24.1% to 11%, of microfinance organisations – from 40.4% to 27.6%, of credit consumer cooperatives – from 34.4% to 20.9%, of pawn shops – from 32.6% to 20.5%, and of insurance entities – from 32.3% to 17.2%.

Such mistrust can result from the lack of basic financial knowledge and misunderstanding of how any particular financial instrument operates. At year-end 2015, the public financial literacy indicator was at 1.86 against 2.1 as target indicator in 2017. The Bank of Russia uses this indicator to assess efficiency of the implementation of the Guidelines for the Development of the Russian Financial Market in 2016-2018 which emphasise a higher public financial literacy as a priority.

The first Bank of Russia periodical called Review of Financial Inclusion in the Russian Federation is scheduled to be published in 2016 H2.