Session: Basic Finance in the Information Age: Moving Toward a Public Good? (Society for Social Work and Research 23rd Annual Conference - Ending Gender Based, Family and Community Violence)

The role of finance in people's everyday lives —in the United States, and indeed in much of the world—has changed dramatically and become more financialized (Martin, 2002). Until quite recently, it was feasible for many people to manage their finances using only cash. Today, this is no longer possible. Even very poor households cannot conduct their daily affairs effectively and efficiently without using basic financial services. With no information-based payment system, most transactions are more expensive in both time and money. Without credit, it is impossible to rent an apartment, make purchases online, or join the sharing economy. Without an efficient and safe place to save for the short- and long-term, household stability and development are very difficult to achieve.

Nonetheless, millions are not served by mainstream financial services. For providers, the cost of providing services is more than the revenue generated. For consumers, fees and other costs are prohibitive. As a result, alternative and sometimes predatory forms of finance have arisen, such as check cashers, car title lenders, and rent-to-own operators (Barr, 2009; Servon, 2017). This industry is poorly regulated and leads to poor outcomes for low-income consumers. In short, as yet, there is not a good market solution for delivery of basic financial services for all.

This symposium explores how policy can promote basic financial well-being, a fundamental goal of social welfare policy. We suggest that financial inclusion in the information age can become like a public utility (efficient and safe for all, but with some fees, e.g., a municipal water system) or perhaps like a pure public good (with no fees other than general taxation, e.g., a public highway system). Because of the universal need for financial services, and the importance of efficiency in scale and delivery, it makes sense for basic financial services—transactions, savings, credit, and insurance—to be centralized as a public service, as a regulated public utility, or as services that private financial companies carry out under contracts with governments. In other words, a set of basic financial services might be understood, planned, and implemented as a public good—in the same way that libraries became a public good in the past.

The symposium includes three studies that use different methodological approaches. The first study assesses the importance of financial inclusion on individual financial well-being, and proposes the idea that basic financial services should be centralized as a public service. The second study use the 2016 National Financial Well-being survey to quantify the importance of financial inclusion (i.e., access to basic finance) on financial well-being for the whole population and, particularly, for the low-income population. The last study explores how financialization not just affects individual well-being but also the operation and implementation of social policies.