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Financial Inclusion and Immigration in Europe: Disrupting Identity Norms

As global tensions rise, a major chunk of the global population starts immigrating, to escape extreme poverty and wartime emergencies. Most of these refugees are escaping to Europe in hope of stability and a better life. Some are fleeing from persecution, religious and political. There is mounting pressure from the international community to grant asylum to these refugees, leading to heavy immigration to Europe. This is creating border crises in multiple regions of the European Union and the European continent. 

While most of the world is wary of this massive influx of refugees, Germany has taken significant steps to provide shelter, sustenance, and financial assistance to these asylum seekers. It also has ways to grant citizenship to legal immigrants and set up bank accounts.

In such situations, financial access becomes challenging to gain. Without financial services, even basic survival necessities cannot be. Regular banking norms in such cases become an obstacle. 

Know that your customer forms require specific details to become irrelevant because people from other countries might not have appropriate documents. Banks and other financial institutions use these forms to prevent money laundering, terrorist funding, and other nefarious activities. Strict requirements are placed such illegal activities can be identified and brought to justice. Still, it is hard to identify a criminal and a refugee searching for asylum in such a situation. 

About BAFIN | Its Role in the Refugee Crisis

Its Role in the Refugee Crisis

In 2015, an image of a three-year-old’s washed-up body came into view, which shocked the international community and the whole world, and everyone woke up to the refugee crisis. Alan Kurdi was making a short but arduous journey from Turkey to Greece but drowned due to turbulence in the international marine borders. Amidst the rejection of the European border guards with raised batons and nozzles of rifles, discouraging asylum seekers across the English channel, this image stood out as a symbol of failure for the international community, propelled economies to counter the refugee crisis and tackle the immigration crisis in Europe. 

In 2015, it was estimated that over a million refugees came to Europe’s shores to seek asylum, fleeing wars, political persecution, and instability. According to the United Nations High Commission for Refugees, or UNHCR, it is estimated that over three thousand people have drowned, making that tumultuous journey across turbulent waters. Some estimates also proclaim that Europe’s immigrants comprise just a fraction of the refugee crisis on hand. 

Ten million people from unstable regions have been displaced, 40% of whom are women and children. On top of that, the Russian-Ukrainian war has displaced millions more, marking one of the largest immigration waves within European soil in modern history. Europe is now looking at the daunting challenge of tackling such massive shifts in demography across the 21st century. Sheltering them is one thing, but providing them with sustenance and access to financial services is another challenge. In such a crisis, Germany’s banking regulatory body BaFin has filled this void since the inception of this crisis.

Background | History 

Germany’s Federal Financial and Supervisory Authority is a banking regulatory body under the direct supervision of the office of Germany’s Ministry of Finance, otherwise known as BaFin. With over 2,700 banks and hundreds of other financial institutions under its supervision, BaFin was born out of need. In 1931, the banking crisis in Europe caused financial instability, which forced Germany to move out of the gold standard over the hyperinflation of the 1920s. 

This crisis ultimately forced the Weimer Republic to create a Prudential Banking supervisor to control and ensure that banks do not gamble away people’s savings. Before this, credit institutions were under the supervision of private savings banks. On the 19th of September 1931, the imperial commission for banking was established. In 1934, this institution was converted into a credit inspectorate committee. It existed after the second world war and throughout the 20th century.

In 2002, a new organization and regulatory body was formed under the Financial Services and Integration Act called BaFin. BaFin was formed by the merger of three Federal Banking and Financial regulatory bodied whose responsibility was to monitor the banking system of Germany. This merger aimed to have a vast overreach over banks, credit institutions, insurance companies, and stockbroking platforms. 

In 2003, the legislation made amendments to the Banking Act, which expanded the powers of BaFin to check, monitor and gauge the creditworthiness and gather intel about these financial institutions. This step was taken to ensure the protection of consumer interest and the integrity of financial infrastructure. From 2015, some of these responsibilities fell on the shoulders of the European Central Bank, established in 2014. 


BaFin was created with the primary responsibility of monitoring and intervening in the operations of banks, credit facilities, insurance, and stockbroking institutions for consumer protection and the maintenance of the structural integrity of Germany’s banking systems and accounting for the money management what bank account for. The institution has over two thousand and seven hundred banks under its supervision and hundreds of other financial organizations handling multiple financial and solvency issues across the financial sector.

A stable macro economy cannot function without a stable and robust banking system. Without a stable banking system, there would be no investor confidence and no rise in productivity and job creation. But the banking system won’t regulate itself to become stable. A supervising authority and regulatory body must ensure the banks don’t gamble on the account holders’ money and collapse the economy. 

The Banking Act was passed to create a comprehensive regulatory body to maintain the integrity of Germany’s banking system and prevent discrimination and credit underwriting. The rules enshrined in this Act were laid down to ensure the banks don’t endanger the account holders’ savings and assets, negatively affect the banks’ orderly standard transactions, and compromise the economy. The rules of this Act do not infringe upon the principles of the free market, with the bank maintaining sole ownership of its policies. 

But financial institutions are subject to some qualitative laws and statutory obligations which can be used against the banks if they defy them. If BaFin detects a solvency issue in a bank, it will intervene and restrict its actions and operations. 

Role in Immigration Crisis

Role in Immigration Crisis

Germany has signed in new laws and regulations dealing with this crisis. To tackle the recent immigration issues in Europe, the German regulatory body BaFin has eased up its regulators regarding account opening and holding. With amendments made to the original Bank Act, the cabinet ministers. Under the new law, every person within German territory will have the right to have a bank account, including the homeless and the refugees, which fall under the Geneva convention. 

Under the supervision of BaFin, which supervises significant banks in Germany, will be obligated to offer migrants coming for asylum basic bank accounts. It means refugees will have the right to deposit and withdraw cash into the German financial markets. This is done as a part of the assimilation procedure to integrate them into German society to form a solid communal bond with German society. 

A bank account adds a dimension of social gravitas and economic value. It may not seem much to people, but for a refugee, it can form the basic foundation for rebuilding a life after someone has lost everything. For many, a bank account forms a layer of their identity. Opening a bank account lets someone deposit money and opens opportunities for other financial services like digital payments for food and utilities like electricity, gas, or internet connections. It can help avail government services and subsidies in health and education. 

However, a refugee can’t open bank accounts. Banks are trustworthy because they have restrictions and verification before they let someone open an account. One has to submit numerous documents and identity proofs to open one. Refugees can’t meet those criteria under any circumstances. Some refugees may not even have passports to verify their names. In such circumstances, BaFin will loosen restrictions for those immigrants to open bank accounts. 

Many governments, however, do not appreciate this policy at all. In times of mass immigration in Europe, federal agencies tighten up laws and regulations to ramp up background checks under the pretext of preventing criminal activity and money laundering. However, these methods are ineffective most of the time. Immigrants are desperate and often use infamous back-channel dealers’ help to open accounts. This makes immigrants more vulnerable and puts forth obstacles to the financial establishment. 

Germany is a member of the G8 club, an exclusive club for the world’s largest developed economies and global leaders regarding financial stability. German banks have trillions of dollars worth of assets worldwide, with even more investment worldwide. With a pervasive network of banking institutions, they are, in large part controlling financial markets globally. So they can financially integrate the immigrants into their system immediately. Mass immigration in Europe has surprised everyone, but Germany can show the way. 

Risk management becomes a challenge in such a situation. According to CPMI or Community of Payment Management Infrastructure, loosening banking account restrictions can reduce trust in the banking sector by encouraging illicit nefarious activities. Lowering KYC criteria can lead to trade-off problems with more money pouring in through informal systems. This system will increase the risk of money being used for laundering and other criminal activity. It increases the risk of internal security threats from terrorist organizations and leads to more innovative ways of eliciting the transfer of black money worldwide. 

Germany will not have a problem with the trade-off crisis. However, BaFin doesn’t see it that way. It already tracks vast swathes of the retail transaction markets and has an advanced electronic tracking system to monitor banking operations throughout the country. Germany’s immigrant population is a minuscule portion of its society, and it doesn’t believe they pose any threat. BaFin believes that making it easy for refugees to open bank accounts will make it easier for the authorities to track their financial movements. 

Enabling immigrants to open bank accounts counteracts the chances of money laundering as it prevents the flow of cash uncontrollably into the system. Account holders can be vetted and tracked to be tagged and targeted by the investigation agency. 

Of course, immigrants will be benefited from this service. Many refugees, such as those from Syria, carry their life saving along with them. If they don’t have access to banking services, it can be a nightmare to utilize them for their sustenance. 

European Foundations Response

As the world sees the crisis unfolding with immigration in Europe, European Foundation has stepped in to counterbalance the effects of the immigration problems. The sheer scale of migration from Africa and the middle east to Europe has caused an international crisis. This crisis ultimately prompted the European Foundations to raise awareness among concerned authorities about the border crisis that is taking place in Europe, which threatens to destabilize law and order at those pressure points. 

Who was a Part of the Survey?

Almost 65 global organizations responded to the call of the European foundation, like well-renowned organizations like OSIE or Open Society Initiative for Europe, Bodossaki Foundation, and Bertelsmann Foundation. Though multiple organizations have worked on migration and displacement, this organization hopes to bring gravitas and awareness to this geopolitical crisis. Another organization, Adriadne, is conducting its survey. Adriadne focuses on the organization, which is from the United Kingdom. 

What Did the Survey Reveal?

According to Adriadne, most of the funds of the respondents that answered them were going towards the security and sustenance of women and children. The other focus areas were securing protection for rights and civil liberties and legal assistance on the International stage, integration efforts in a community, and efforts to eradicate prejudice towards refugees. The funding is also sent towards local humanitarian aid working on site. 

Meeting Urgent Needs

Unsurprisingly, the survey reveals that humanitarian aid has been improving the living conditions of the immigrants and integrating them into the society where they have taken shelter efficiently. Parallel to this survey, the financial inclusion week final recap also stresses that It is an understatement to say that the effects of immigration in Europe have been colossal. 

But steps are being taken to integrate the refugees into mainstream society and financial inclusion in Europe and its immigrants. The surveys noted that the ventures foraying into these uncertain territories concentrated on immediate needs like food, clothes, and medicines. Other experienced foundations are gathering resources for the availability of emergency funds. 

Many organizations provide money for legal aid or directly offer legal aid to them for their legal and civil rights as refugees. Brussel-based organizations named King Baudouin foundation have set up funds upwards of nine hundred thousand euros for such emergency contingencies and later plan to allocate over four million euros for this purpose. 

According to Ariadne, the respondent organizations focus on emergency funding as rapidly and efficiently as possible. The main objective of most organizations is improving living conditions and protecting fundamental human rights. The respondents of Aridane are also ensuring the immigrants’ voices are heard on the international stage and their rights are protected. The organizations are also negotiating with countries like Saudi Arabia to grant them asylum till a better accommodation can be made. 

Beyond the present emergencies, multiple organizations are thinking long-term. They are providing funds for affordable housing, medical assistance for immigrants in Europe but also mental health assessments like trauma counseling, post-traumatic stress disorder, access to job markets, and linguistic help for communication. 

Today venturers understand the importance of collaboration. So though their main focus is on providing humanitarian aid, they have also tried to negotiate with corporations and politicians, getting researchers to avail top-notch data and advice. Most organizations understand that the root of the problem lies in the large scale of immigration in Europe issues, which the international community was unprepared for. Most ventures said they would be approachable to work with other organizations if necessary. 

However, there’s a shortage of guidelines and previous precedents of projects undertaken by other previously successful organizations. Despite such odds, major high-profile organizations are underway. The Africa board fellows deliberated that overindebtedness causes problems in microfinance. The European Programme for Integration and Migration (EPIM) is the most effective collaboration platform. It acts as a platform for other organizations to get funded for their collaboration. 

More such collaborations are springing up that can mitigate the negative effects of immigration in Europe. The EPIM sponsors multiple, among which the Supported Option initiative, which extends legal advice to migrant students and children brought into these countries by their parents who don’t have immigration status or are undocumented. Another one of their initiatives is called the Future Advice Fund, which advises legal bodies about the social security of immigrants in the face of a cutdown on legal aid. 

Fighting Prejudice

The immigration crisis in Europe has taken authorities by surprise and completely unprepared. This has led to a border crisis and the potential collapse of significant infrastructures to deal with this crisis. This is one of the reasons why has immigration to Europe caused controversy in recent years. A sudden influx of migrants fleeing war and political instability has put a strain on the resources of the respective countries and thereby has fueled chaos. 

Fighting Prejudice

Taking opportunity of these difficult times, nefarious organizations have started to fill the conversations and public forums with divisive and polarising statements. Politicians have also followed this route and stirred controversy by fueling tensions and hatred among people of different identities. 

All over, incidents of racism and abuse are coming out on social media and mainstream news. There are cases of discrimination and violence towards people of color, other religious groups, and ethnic minorities. In such precarious times, integrating immigrants into the local community becomes challenging. 

Moreover, savings a key to merchant payments in developing countries is also important for them to hold on to as citizens. Luckily many foundations are helping migrants to stand up to prejudice, and other organizations are helping them to contribute to society in different ways. 

However, on the opposite side of the spectrum, we have an outpouring of compassion for this immigration after the image of Alan Kurdi’s dead body washed up shore. This is another reason why has immigration to Europe caused controversy in recent years. Many border guards have decried human rights and hurled abuse, including subjecting them to physical violence and even shooting some of them dead. 

Prudently, some foundations have managed to take advantage of the crescendo of sympathy among the general public to secure consensus and approval. For example, in the United Kingdom, where the refugee crisis has had fewer adverse effects, foundations and charities have been swamped with offers of volunteers and as well as monetary support for hiring professionals. 

Whether some have converted to the cause or were previously passionate about it, the enthusiasm is palpable and wholeheartedly welcome. This heightened participation has been strategically significant as the increased labor participants kept things in order and ensured smooth operations. Sympathy, in many ways, has reduced the negative effects of immigration in Europe.

Opportunities for Increasing Advocacy 

Monetary philanthropy has its place in situations of mass immigration in Europe. Philanthropy has ensured the basic and necessary sustenance. However, organizations have to think long-term. Providing them with food, clothing, and medicine is crucial, but that is not sustainable in the long run. The migrants need access to job security, affordable housing, legal status, and civil rights to integrate and establish themselves in the local society. Building and contacting advocacy groups is necessary to stop human rights abuses and labor exploitation. 

One of the best ways to secure the refugee’s safety was to link them to the pathway to legal migration status and eventually to legal citizenship. For instance, the charitable organization Oxfam generally does surveys and researches labor rights and income inequality, to reach out to immigration lawyers or laws that specialize in immigration law. There has been quite an upstir from the celebrity fraternity, with numerous TV hosts, sports, and movie stars speaking about it wholeheartedly, along with books such as Scarcity why having too little means so much book, which shed light on it.

EPIM | A European Collaborative Response 

The way the immigration crisis has unfolded in Europe needs a comprehensive policy to tackle this crisis. While Germany’s BaFin has taken steps toward financial inclusion in Europe by giving them access to bank accounts and enabling them to establish themselves financially, such fragmented efforts can go so far. Europe needs a unified approach to tackling the millions of immigrants already here and preparing for the millions to arrive. In such a crisis, European Programme for Integration and Migration provides relief. 

European Programme for Integration and Migration is a collaborative effort of 14 partnerships and 11 associated foundations. Founded in 2005, EPIM’s primary function is to provide constructive and practical framework and advice for the immigration crisis in Europe. EPIM works on four main principles:

  1. The migrants in Europe need financial and legal certainty to establish themselves. EPIM believes in making dialog with civil society to strengthen it. But that cannot happen if civil society, such as lawmakers, corporations, or mainstream politicians, are completely aloof or ignorant of the plight of the immigrants. EPIM believes in collaborative efforts and recognizes all members of civil society to participate in creating a unified framework and policy and implementing those policies for the general good. They aim to bridge the gap between different viewpoints and create a pan-European solution that benefits all of us. They try to empower through grants and donations. 
  2. The European Programme from Integration and Migration conducts its operations through data-driven techniques. In times of geopolitical crisis, allocating resources can be challenging, and targeting the groups that need the most resources is critical. EPIM responds to such challenges in distinct and interconnected areas of priority. During mass immigration in Europe, children and women of color are considered vulnerable. Most of these women might be under-educated and victims of sexual assault and domestic abuse. Some children might be victims of trafficking, which can put them in constant trauma of physical and mental abuse, not to mention being subject to extreme malnutrition. So, resources must reach them first. Also, in terms of quantitative resources, they will need them the most. 
  3. EPIM advises on human rights violations and alternatives to migrants’ detention and deportation. The organization aims to provide humane treatment of migrants in dentation centers and enable the migrants’ rights to free movement. It also enables to foster of a developmental and cohesive relationship with the refugees. This helps further integration and protects them from falling prey to nefarious criminal activity out of desperation or coercion. 
  4. European Programme for Integration and Migration has always acted as a platform for other foundations to access resources and allocate them to critical areas. EPIM offers underfunded organizations to expand their field of operations and collaborates with them to run their process efficiently and gain legitimacy. EPIM offers a strategic platform to bridge the gap in infrastructure deficiency that the foundations often face while working in the field on their own. 

Common European Asylum System

In 1991, the Common European Asylum System was developed to have a unified and comprehensive solution to the immigration crisis in Europe and provide them with the humane and equitable asylum necessary for their sustenance. According to its charter, all European Union member states are responsible for providing asylum seekers with a dignified way of life and human rights protection. 

In 1999, European Union started moving towards a standard migration policy and unified way to deal with immigration issues in Europe. The laws and legislation complied with the 1951 definition of a refugee according to the 1951 Geneva Convention. Under the Tampere Programme, commitments were taken by all EU member states, and new laws and regulations were adopted in the course of the signing. 

Between 1999 and 2005, the European Union codified multiple laws under the directives of CEAS, including the Temporary Protection Directive, Eurodac Regulation, and Reception of Asylum Seekers Directive. The Dublin Directive replaced the Dublin convention in 1990. In 2008, European Union passed the Policy Plan on Asylum Act to create an infrastructure for fleeing wars and other crises. 

EPIM has its primary focus targeted at reforming the Common European Asylum System. According to EPIM, Common European Asylum System does very little for children separated from their families. They also did very little for women without education and were subjected to physical and mental abuse. The idea is to dignify those people’s lives and usher in financial inclusion in Europe. The organization does this with the support of countries like Belgium, Germany, Italy, France, and Spain. 

Principles of EU mobility

European Union allows the citizens of its member states to roam freely across national borders without needing any visa and other legal and authority permissions. It benefited the European Union as mass migration dissipated and diluted throughout the continent to reduce the negative effects of immigration in Europe. A migrant coming to Europe through different means battling arduous conditions will need facilities to roam the European Union. 

Frequently Asked Questions (FAQs)

Q1. What are some challenges that immigrants face?

Immigrants facing war and political instability must face arduous conditions of turbulent waters and bitter cold to arrive in a safer place. After, in their host country, they face discrimination, abuse, and racism. Also, they take time to settle and establish themselves socially and financially. 

Q2. What is the delicate issue facing Europe?

In 2015, migration in Europe exploded, with immigrants coming from north Africa and some parts of the war-ridden Middle East to Europe for a safer and better environment. In 2020, European Union again faced a crisis with the Russian-Ukrainian War, none of which they were prepared for. The migrants need food, shelter, and legal assistance. However, multiple foundations are working to give them the humane conditions and legal rights they deserve. 

Q3. How does the EU deal with immigration?

European Union passed the Common European Asylum System, where they constructed a unified and comprehensive framework to deal with the immigration crisis. Also, multiple foundations, like European Foundations and EPIM, also provide resources and awareness to humanize the situation. 


In 2015, as the picture of Alan Kurdi’s picture circulated on the internet and social media, the whole international community was shocked and woken to the immigration in Europe issues. This experience of Alan Kurd is representative of the conditions that most immigrants face while traveling to Europe. According to a survey, over a million people have fled different social-political conditions in their home country. 

Over three thousand people have died drowning in the waters. The ones that reach the shores of Europe are often met with hostilities. Over the years, multiple foundations and organizations have worked to achieve humane conditions for these immigrants and get them financial inclusion in Europe. Germany is empowering BaFin to enable immigrants to open bank accounts. 

European Union is reforming the Common European Asylum System, and European Programme for Integration and Migration is making resources available and assisting other foundations to achieve their goals.

Author Profile

Jonas Taylor
Jonas Taylor
Jonas Taylor is a financial expert and experienced writer with a focus on finance news, accounting software, and related topics. He has a talent for explaining complex financial concepts in an accessible way and has published high-quality content in various publications. He is dedicated to delivering valuable information to readers, staying up-to-date with financial news and trends, and sharing his expertise with others.

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