• Ieva Janarauskaite, Communications Specialist at Mistertango


• 27.09.2022 10:45 am
#fintech

Globally around 1.7 billion grown-ups remain unbanked. The four main reasons why people are unbanked are financial illiteracy, inflexibility of traditional financial institutions, complex personal requirements, and difficult access to services. Although not all of the reasons can be easily solved, at least some of them can be successfully tackled with the help of the Fintech industry.

What Is Financial Inclusion

First, let's talk about financial inclusion and what it is. Financial inclusion refers to making financial products and services accessible and affordable to all individuals and businesses, regardless of their net worth or company size. Financial inclusion aims to remove the obstacles that exclude people from partaking in the financial sector and use these services to improve their lives.

How Does It Work

Over the last decade, when FinTechs started to gain more confidence, over 1.2 billion previously unbanked adults gained access to financial services, and the unbanked population fell by 35%, primarily boosted by the increase in mobile money accounts. FinTech can democratize access to finance, and the world can move closer to fulfilling financial inclusion. As researchers claim, greater use of FinTech is significantly associated with a narrowing of the class divide.

Technology allows people to use the tools wherever the internet is available, eliminating the need to travel, and reducing travel costs and time. FinTech can lower costs while improving speed and accessibility, allowing for more customized financial services. Improvements in FinTech, such as digital money transactions, are making financial inclusion achievable.

The user experience is very simple and easy to understand. The FinTech sector is driven by technology that helps many people get banking services much quicker, and people do not need extra knowledge of technology to use FinTech products. It is not rocket science.

If there is a lack of knowledge, the popularity of FinTech encourages people to learn about the industry and its products through social media channels, internal blogs, and other media outlets.

FinTech is more flexible than traditional banks. Of course, both have requirements, but FinTechs are more flexible on them, so that people’s access to financial services should not be limited. FinTech helps to get financial services accessible to people who have been previously rejected by traditional banks. This way FinTechs are changing the very complex field of finances for many adults.

Fintechs provide security in terms of digital finance. As the number of innovations is increasing, FinTechs are up for a game with traditional banks. The privacy that FinTechs have are at an extremely high level.

Thanks to FinTechs, new technologies, and easier accessibility to finances, fewer people are being excluded from significant services of finances. It has shown — financial inclusion is not only a goal itself but also an enabler and accelerator of economic growth.