Can Fintech Enable Financial Inclusion For Underserved Populations?

In traditional banking, underserved populations have difficulty accessing many services. Then, when mobile solutions and digital opportunities were added to banking services, every place and every customer profile with an internet connection began to access banking services. Financial inclusion is a financial principle that aims to provide equal and fair banking services to customer profiles at all income levels.

All customer profiles, including underserved populations, can receive the same service in fintech projects that comply with the principle of financial inclusion. Fintech products and services play a very effective role in financial inclusion as it is a model where everyone can receive the same banking service with a mobile phone and internet connection.

Fintech efforts with online banking solutions such as developing digital payment alternatives, diversifying mobile banking solutions, and offering microcredit projects appear as a great solution for underserved populations who have access problems to financial services. For example, a citizen of a developing country may have difficulty traveling to a physical branch of a bank.

In such a case, he cannot access the services offered by banks. However, by taking advantage of fintech solutions, one can access almost all banking services via a mobile phone. This can be a good example of financial inclusion.

How Do Fintech Solutions Address Financial Inclusion Challenges?

Fintech products and services develop many methods to overcome the factors that make it difficult to implement the principle of financial inclusion. Mobile applications and digital wallets that allow bank accounts to be managed remotely and online increase accessibility for everyone with their user-friendly interfaces.

Automatic credit assessment services, one of the trending technologies of recent years, can be provided as one of the digital solutions developed by fintech companies to overcome the difficulties in financial inclusion. Credit evaluation, which is a long and tiring manual process in traditional banking, is completed in seconds with fintech solutions.

With artificial intelligence tools working with machine learning technology, customer data is quickly analyzed and appropriate credit services are recommended. In this way, every customer profile with an internet connection receives the same service and financial inclusion is ensured.

Fintech products and services contribute to financial inclusion by aiming to provide the same service regardless of the income level of the customer profile. Financial inclusion is not easily achieved, especially in countries with underserved populations. The problems faced by fintech companies or startups in such markets need to be overcome with customized digital solutions.

What Are The Key Factors Hindering Financial Inclusion Globally?

Although financial inclusion is a principle that is desired to be made more widespread by both states and citizens, there are some factors that prevent its adaptation on a global scale. Low income level can be considered among the most important factors hindering the development of financial inclusion. Low income levels challenge and limit access to banking services.

Another common factor is inadequate financial literacy. Often in developing countries, financial literacy is not at sufficient levels, which makes people less interested in financial products and services. This greatly harms financial inclusion.

Access difficulties in rural areas can be mentioned as another critical reason that harms financial inclusion. Such problems can be experienced in many countries in Africa. This both causes citizens’ financial literacy to not improve and prevents citizens from accessing banking services. If there is a fintech solution that wants to serve in this type of market, it first looks for ways to eliminate these access barriers.

What Are Some Innovative Fintech Initiatives Promoting Financial Inclusion?

The principle of financial inclusion is achieved through products and services that aim to reach customer profiles at all income levels. At this point, it would be very impressive if companies working on financial technologies take initiative.

Financial inclusion should be promoted not only by governments but also by fintech companies or startups. They can ensure the successful implementation of financial inclusion by providing digital solutions such as mobile payment systems. In addition, cryptocurrencies, one of the popular trends of recent years, can be remembered as a fintech initiative because they are decentralized and digital.

Developing easy-to-use banking applications with a user-friendly interface by Fintech companies can greatly contribute to financial inclusion. Of course, it is important that both states and the markets in which they operate contribute to the encouraging atmosphere.

How Can Microfinance And Mobile Banking Improve Financial Inclusion?

The most important condition of the principle of financial inclusion is that everyone receives the same quality financial services. Ensuring this principle in developing countries is directly related to the products and services developed by fintech companies. Microfinance and mobile banking, which are the most common fintech solutions, are the most effective methods of providing the same banking service to everyone.

Microfinance services include services that provide small loans and financial literacy programs and specialized banking services to relatively low-income individuals. Mobile banking is where customers access the financial products and services offered by the bank via a mobile phone. Thanks to this digital method, every customer profile receives the same service under the same conditions.

Microfinance and mobile banking solutions are among the most important fintech services that enable financial inclusion in challenging markets such as developing countries.

What Are The Metrics For Measuring The Success Of Financial Inclusion Efforts?

It is possible for us to measure how successful or not the principle of financial inclusion is in a market. The most popular metric for measuring the success of financial inclusion campaigns is bank account opening rates. In addition, many data, from mobile payment usage statistics to credit utilization rates, can also give us ideas.

In addition, statistics such as economic growth and development can be important evidence of how successful or not financial inclusion is. In a developing country, measuring financial inclusion will be more reasonable if the demand for fintech products and services is analyzed after a certain period of time, which products and financial services cause an increase in demand compared to the past.

See you in the next post,

Anil UZUN