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How fintech firms drive financial inclusion in Asia
While the majority of fintech efforts focus on bringing financial services to digital platforms, some start-ups are integrating physical devices with their technologically-enabled solutions.
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Illustration of financial technology (fintech). (Shutterstock/File)
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ringing the billions of unbanked and underserved people around the world into the formal financial system is no easy feat. The traditional structures of financial institutions — physical branch networks — have limited their reach to where they can set up a bank branch or an ATM, making them unable to deliver their services to far-flung communities.
This financial exclusion, which is more prominent in emerging markets, is seen as a major deterrent to personal and community development. The 2017 Global Findex from The World Bank reveals that the poor “account for a disproportionate share of the unbanked [population]”. These communities resort to informal sources for their loans, savings and investments that often have unfair rates and deals.
It is a massive pain point being addressed by financial technology (fintech). From mobile wallets to web-based platforms, fintech firms are giving unbanked communities easier and fairer opportunities to pay their bills, ask for loans, open savings accounts and more without needing a bank branch.
While the majority of fintech efforts focus on bringing financial services to digital platforms, some start-ups are integrating physical devices with their technologically-enabled solutions.
This allows them to reach rural areas that may not have the infrastructure required to support purely digital platforms, as well as to better speak to unbanked individuals who may not be familiar with electronic services.
One of the most recognizable hardware linked to financial services is the ATM. These machines allow individuals to access their money even if they are far away from a bank branch.
However, ATMs generally cater to individuals who already have bank accounts, and the logistics of maintaining them dissuades financial institutions from installing a machine in far-flung areas.
