With the unemployment rate going up, billions of people still under the poverty line, and the mass majority still poorly-informed about financial services and products, the need for financial inclusion is high. Financial inclusion serves as a gateway for everyone to make secure transactions and get access to essential financial obligations such as savings, credit and debit cards, fixed deposits, funding, and more. These modern needs push for a collaborative economy where the goal is to uplift the lifestyle of everyone.
An essential part of being able to do so is the adoption of fintech and continued research and development to advance it further. Fintech offers us a means of accessing sustainable finance. When more users can utilize services provided by financial institutions to store and grow money, make regular payments, receive money from other users, and gain an overall control with their finances, we can say that financial inclusion is spreading effectively.
Fintech offers us the luxury to advance these financial services and not just make payments available to everyone but also remove barriers to entry, spread more financial awareness, and make the digital transaction experience better. The evolution of technology and the adoption of digital transformation, the financial services industry has been revamped. More businesses and fintech startups have leveraged the applications of financial technologies adopted Open APIs and curated customer experiences.
Let us have a closer and detailed look at how fintech startups spur financial inclusion worldwide.
Accessing new financial market segments
It is crucial to learn where you can make an impact before setting down to create a roadmap. Fintech startups are working tirelessly in gaining access to new market segments that can give them an in-depth look regarding the size of the requirement and its scope. This access is achieved by joint ventures with venture capital companies for fundraising, crowdfunding, and intelligent fund distribution.
Plus, this also helps fintech create new offerings for the end-users and provide them with reliable, affordable, accessible, and valuable financial products for growth and financial inclusion.
An excellent example of businesses using fintech to access new financial market segments is the Santander in the UK. They needed to accelerate the process of underwriting loans to cater to a wide range of audiences in reduced time. Santander needed an automation solution that could stay compliant with all regulations while processing loans for small and medium-sized companies. They licensed Kabbage to automate this process, allowing them to bring in new SMBs into their business portfolio.
Intelligent data collection and utilization of big data analytics
Fintech startups are taking a different road than their legacy predecessors. They work mostly in collecting data and running big data analysis on it. Fintech can find out which geolocation has highly targeted customers, the spending habits of a target group, which service is required to be offered to someone, and more.
Big data analysis helps fintech receive actionable insights on their financial products, the preferences and needs of the end-users, the most appropriate channel to reach these customers, and how to push forward the cause of sustainable finance. Harnessing such an advanced innovation also helps fintech receive more opportunities for crowdfunding and joint ventures.
Another purpose that fintech startups are trying to achieve is data security. For active financial inclusion, it is crucial for fintech to provide financial services that are safe and secure. Any shady or threatening services can have a crippling effect on their growth. Big data analysis teamed up with artificial intelligence has helped fintech add additional layers of protection to digitized finance and helped end-users conduct business with improved ease, convenience, and safety.
Enhancing customer experience and engagement
For long, the relationship between financial institutions and their customers has been strained. Users are hardly able to get in touch with financial institutions for simple queries, every little change to be made had to be taken care of by going to the branch itself, credit cards wouldn’t work sometimes. Plus, the biggest problem was deprived of access to financial services and the high chances of fraud.
However, fintech startups have already brought about a significant change in this aspect. With better fund distribution, they can allocate appropriate resources to build services that are advanced in nature and easy to use and access. This ease has helped fintech startups enhance customer experience and engagement.
It has also enabled them to chalk out a path towards sustainable finance. With increased fundraising and effective partnerships with joint ventures, fintech startups work tirelessly towards creating reliable long-term solutions. These solutions can include anything – advanced digital payment solutions like QR code payments or digital payment wallets, providing easier access to account information, allowing faster query resolution with chatbots, and better targeted financial products.
With smoother, convenient, and global access to such robust solutions, end users can safely utilize them as per their needs. It is only when you grow together that you can spearhead the journey towards 100% global financial inclusion, and that is what fintech startups are striving for.