Dan Houston

Singapore is the world’s most financially inclusive market, alongside the U.S., Nordic Europe, and Hong Kong, according to the inaugural Global Financial Inclusion Index (Index) sponsored by Principal Financial Group®. The research, conducted by the Centre for Economics and Business Research and released today, examines how well a market’s respective government, financial system, and employers provide relevant tools, services, and guidance to enable greater levels of financial inclusion.

“Financial inclusion is foundational to global economic progress. As an organization focused on helping more people gain access to financial security, we believe inclusion is an integral component of a market’s ability to prepare for and recover from adversity, grow sustainably, and build a brighter future,” said Dan Houston, chairman, president, and CEO for Principal®. “The Global Financial Inclusion Index provides a rigorous, data-driven framework to track financial inclusion on a global scale. Through this we can identify the structural gaps in financial inclusivity and take steps to address them, along with many others, to help build a more productive and protected workforce and society.”

The Index examines 42 markets and scores them across three pillars — government support, financial system support, and employer support — using datapoints across public and survey-based sources.

The government support pillar examines the degree to which governments promote and enable financial inclusion, considering data on public pension support, deposit and consumer protections, employment, education, and financial literacy levels, and online connectivity.

The financial system support pillar reviews the availability and uptake of various financial products, services, and education, considering data on access to bank accounts and credit, maturation of financial technology and use of real-time payments, and the overall effectiveness of the financial services industry in promoting confidence and small to medium sized business growth.

The employer support pillar evaluates the availability and impact of employer programs to improve employee financial wellbeing and inclusion across various dimensions such as employee pension contributions, employee insurance programs, and financial guidance

In its first year, the Index is helping to develop a benchmark for financial security and inclusion across global economies.

Key findings

• In general, developed economies tend to pool towards the higher end of the Index, and emerging and developing economies cluster at the bottom. Six of the top 10 markets for financial inclusion are European and, within this group, four are Nordic. Europe’s larger economies rank at the bottom of the table, with Italy as a particular outlier at 37th. The lower half of the ranking consists mainly of countries in Latin America, sub-Saharan Africa, and Asia. Argentina ranks last.

• Economies that provide strong support from their government and financial system tend to provide a lower level of employer support – and the reverse is also true. Developed economies typically score well for government and financial system support, whereas emerging economies generally score better for Employer support.

• When considering this research on an investment basis, the markets analysed can be broadly grouped into four categories – mature, forward-looking economies; mature, backward-looking economies; young, forward-looking economies; and reliant economies – each of which provides an indication of several of the short-, medium- and long-term risks to which economies are exposed. There are some outliers to these categories – primarily some of the largest economies including the U.S., China, and India – which do not fit neatly into a single category.

• The findings suggest financial inclusion may be a powerful indicator of next generation capital and wealth markets globally. When performance in each pillar is strong, it helps promote business growth and confidence and may lead to accelerated development of a capital market. These three pillars can provide insights into its overall economic maturity and development of a market and suggest ways to drive progress.

• Markets which rank highly for financial inclusion tend to also perform well on other societal factors such as food security, productivity, economic and social resilience, standards of living, and climate change adaption. There are strong, positive correlations between the Index rankings and the rankings of markets in several other indices which track the key factors affecting global populations today.

“The Index provides a data-driven, horizontal view for developed and emerging markets to learn from each other when it comes to fostering a financially inclusive citizenry,” said Kay Neufeld, head of forecasting and thought leadership at the Centre for Economics and Business Research. “We tracked the Index against metrics that follow some of the most significant trends facing society today – like food insecurity and climate change – and recognized a clear relationship between financial inclusion and those factors that contribute to a successful society.”

Global Financial Inclusion Index

Top 10 Scoring Markets:

1. Singapore (68.9)
2. United States (68.3)
3. Sweden (65.4)
4. Hong Kong (65.1)
5. Finland (64.7)
6. Denmark (63.9)
7. Australia (63.6)
8. Switzerland (63.4)
9. Norway (63.1)
10. The Netherlands (59.8)

Bottom 10 Scoring Markets:

33: Turkey (36.1)
34. South Africa (34.1)
35. Brazil (33.9)
36. Mexico (33.3)
37. Italy (32.8)
38. Peru (32.7)
39. Colombia (32.2)
40. Nigeria (26.9)
41. Ghana (22.2)
42. Argentina (19.2)

Read the full report.

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Dan Houston

Principal Financial Group® has announced its investment unit will be doing business as Principal Asset ManagementSM as the company intensifies its focus on asset management. This name will highlight the firm’s deep, local knowledge, and global perspectives across all asset classes to help drive long-term investment outcomes for clients.

“Asset management is a core growth driver for Principal, adding significant value to the company both financially and strategically in our goal to provide holistic financial solutions,” said Dan Houston, chairman, president, and chief executive officer for Principal®. “As markets mature and fluctuate, and demand for global investment solutions increases, Principal Asset Management is well positioned to help our clients achieve their financial goals.”

Principal Asset Management has been working to unify and strengthen its investment teams, processes, distribution model, and products to execute on a forward-looking strategy that reinforces its specialized investment expertise. The $507.1 billion^[1] asset manager is leveraging talent, technology, and its global footprint to bring the firm’s public and private market capabilities together to best serve its diverse client-base, which includes more than 800 institutional, retirement, retail, and high net worth investors across more than 80 markets.

Resources have been devoted to building new products and alternative investment options such as model portfolios and direct lending, respectively. Strategic hires have been made to support growth initiatives like global wealth alternatives and liability driven investments. And the client experience is being transformed with a digital strategy that combines data analytics with market insights from Principal Asset Management investment experts to help clients optimize portfolios and to deepen their relationships.

“We’re building and strengthening relationships with investors in over 80 markets, aligning our growth strategy to their needs and the evolving market opportunities to solidify a consistent global identity,” said Kamal Bhatia, chief operating officer for Principal Asset Management. “Principal remains focused on identifying compelling opportunities by providing clear perspectives that are harnessed by the power of our diverse, local investment talent. A global asset management platform that brings deep, specialist capabilities will continue to actively unlock insights and opportunities for all our clients.”

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[1] As of June 30, 2022

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Dan Houston

Principal Financial Group^® has announced it will launch the Global Financial Inclusion Index (“Index”) in collaboration with the Centre for Economics and Business Research (Cebr).

The inaugural Index and its analysis will uncover key drivers shaping financial inclusion and exclusion across governments, employers, and the financial services industry in 40+ markets. The report, scheduled for September, will assess how these systems promote financial inclusion, as well as examine global consumer perspectives on how secure individuals feel. The goal of the Index is to fuel actionable insights that can help improve financial inclusion now and in the future.

Financial insecurity affects billions of people around the globe

Global financial insecurity represents one of the world’s greatest challenges and opportunities. Pre-pandemic, 1.7 billion people globally^[1] were reportedly not served by a bank or financial institution. The effects of the pandemic brought increased rates of poverty and widened the wealth and income gap,^[2] further exacerbated by the recent sharp spike in energy prices.

“Financial inclusion is at the foundation of global economic progress,” said Dan Houston, chairman, president, and CEO of Principal^®. “When people are excluded from the financial system it hinders their ability to earn, prepare for and recover from crises, as well as build for the future. Our Global Financial Inclusion Index will provide a clear, measurable view of financial inclusion so we can influence change and help more people and businesses have greater access to financial security.”

A commitment to making financial security more accessible

Principal is committed to long-term, responsible, and sustainable actions to create economic opportunity for generations to come. As part of the Principal environmental, social, and governance (ESG) strategy, largely aligned to the UN Sustainable Development Goals, the company has outlined measurable commitments to advance inclusive products, services, and communities and to meet more individuals and businesses where they are in their financial journey. In addition, The Principal Financial Group Foundation, Inc. is investing $30 million between 2021 and 2022 to help meet basic needs, develop pathways toward economic mobility, and support financial empowerment and development with a focus on entrepreneurs, small businesses, and diverse populations.

With the Index, Principal will further its focus on seeking to help all people have access to effective systems and affordable resources, solutions, and advice.

A clear understanding of financial inclusion can advance global economic progress

The Index will use employer and consumer surveying alongside verified public data to create a financial inclusion scoring system. Through consideration of these key data points, the Index will evaluate the degree to which governments promote financial inclusion, examine the availability and uptake of financial products and services for populations, and assess the level of support employers provide to their employees in each market.

As such, the Index will serve as a comprehensive and insightful resource used across sectors – from policymakers, academia, and non-governmental organizations (NGOs) to businesses and the financial services industry. It will also serve as an assessment for awareness, action-planning and resource allocation.

The Index will help Principal and key stakeholders:

• Add dimension to the ongoing dialogue on financial inclusion as a core component of financial security.

• Use data-driven insights to have a clear understanding of the barriers to financial security and produce alternate pathways that broaden access to financial solutions and support.

• Advocate for financial systems that enable long-term financial security, stability, and advancement.

• Determine impactful collaboration opportunities to help drive positive change.

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[1] UNSGSA, 2017
[2] World Bank, 2021
[3] Principal’s environmental, social, and governance (ESG) strategy

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