Now encapsulating a focus on societal impact and the environment, the term ‘fintech for good’ has evolved from its initial meaning of charity. But it doesn’t stop there. This July, we are on the hunt to find out how the fintech industry is doing ‘good’ for local communities and the world, revealing current and future plans to make change.
When thinking about a financial service doing ‘good’, one of the first things that comes to mind is accessibility. Financial firms have historically been difficult for certain groups to gain access to due to a variety of checkboxes that needed to be filled out. However, the emergence of fintech has allowed many of these groups to find the support they need financially due to new, unique offerings. It has also acted as a wake-up call for many incumbents who have noticed they are losing clients to the newcomers on the block.
So what are incumbents doing to become more accessible? We set out to find out…
Partnering with fintechs
For Michael Zetser, CEO, of Flyfish, the global digital banking marketplace, the answer many incumbents are looking for lies with their perceived threats: fintechs. By collaborating with fintechs, incumbents can accelerate their digital journeys and fast-track their ability to be more accessible to a wider group.
“Financial incumbents are increasingly collaborating with fintech startups to enhance their service offerings through external platforms. These partnerships allow incumbents to host their diverse financial services on a centralised platform, significantly simplifying user interactions and broadening their reach. This consolidation fosters inclusivity, making financial services accessible to a wider audience with varied economic backgrounds.
“Incorporating advanced features such as personalised financial dashboards into these platforms streamlines financial management, making it more intuitive and user-friendly. Furthermore, fintech leaders are driving the integration of financial education within these platforms.
“This addition helps to demystify financial concepts, thereby building knowledge and boosting confidence among users. For smaller businesses, these platforms address significant challenges such as high costs and complex access to traditional financial systems. By offering clearer, more accessible financial guidance and reducing barriers to entry, these platforms empower smaller businesses to secure the financial resources they need to expand.
“By leveraging these unified systems, incumbents are effectively dismantling traditional barriers to financial access and revolutionising how they serve a digitally-savvy and diverse clientele. This shift demonstrates a commitment to creating more inclusive financial ecosystems.”
Personalising services through AI and ML
Echoing Zetser’s sentiment about partnering with fintechs, Mila Khrapchenko, co-founder and co-CEO at Ameetee, a B2B fintech platform, also noted the importance tech can play in allowing firms to be more accessible.
“Incumbents, or large established market players with significant market share and a stable position, are often perceived as somewhat slow-moving giants. However, digital transformation has affected everyone, including these major players.
“They are adopting user-friendly web and mobile applications, significantly reducing service delivery costs. Many operations can now be automated, such as remote account opening, requesting credit limits, deposits, and brokerage accounts.
“Moreover, although the process might be slower for these large entities, they are also moving towards various partnerships with fintech companies or jointly backing some initiatives. This trend helps them to serve their customers more efficiently and effectively by meeting their needs more promptly. Examples include quick onboarding processes and digital payment networks like US Zelle which was initiated and supported by major US banks.
“Additionally, these companies are likely leveraging artificial intelligence and machine learning to process data and personalise services. In some markets, there are initiatives related to open banking, which makes services more accessible, reduces fees, and lowers average costs for different services. This comprehensive approach is what we refer to as financial inclusion.”
Data is the key
Data has emerged as one of the most important assets an organisation can have. After all, as the saying goes: knowledge is power. And in the modern day, data is knowledge.
Christian Widhalm, CEO, Bloom Credit, the credit data solutions provider explains how incumbents can offer greater, more inclusive services by utilising data.
“Incumbents are seeking solutions that can enrich their ability to understand their customers. Whether their customers are being banked by the institution, or if they’re being banked elsewhere, to learn things they can’t find on a consumer credit report.
“Opportunities with things like consumer-permissioned data, specifically around consumer bank transactions, can help FI’s learn more about their customer and provide them with better products, make more intelligent credit risk decisions, and help their customers directly to enrich their credit history. It’s a win-win.”
Targeting unbanked communities
Tachat Igityan, CFO and founder of destream, a financial platform for content creators, notes that certain offerings can be the godsend unbanked consumers need.
“As a means of being more accessible, incumbents are changing their approaches while adopting digital transformation, and this is mainly done by introducing mobile banking apps and online services so as to make it easy for the customers to reach out.
“For example, they are customising these offerings through data analytics. To promote financial inclusion, fintech companies have also developed no-fee accounts and microloans that target the unbanked communities. All these strategies jointly boost accessibility while embracing evolving customers’ demands in contemporary banking systems.”
Tailoring products to each customer’s problem
Jeff Wissel, chief accessibility officer at Disability:IN, the firm driving disability inclusion explains how products are being catered to varying technical preferences and requirements.
“Incumbents in the financial technology sector are increasingly recognising the importance of accessibility in their offerings.
“They are considering a wider range of disabilities when creating customer personas, ensuring that their products and services cater to varying technical preferences and requirements.
“This inclusive approach helps in designing solutions that are more user-friendly for individuals with unique needs. Additionally, companies are exploring ways to make financial education more accessible. This includes tailoring educational content to be more relevant and understandable for customers and prospects with disabilities, thereby fostering a more inclusive financial community.
“Furthermore, incumbents are offering modified debit and credit cards in large print and braille formats, making them accessible to blind and low vision individuals. They are also introducing digital cards that are designed to be accessible, ensuring that all customers can manage their finances with ease and independence.”
