With global investment in fintech growing leaps and bounds in recent years, the opportunity for financial technology, software, and startups to seize new global markets is enormous.
This is especially true when it comes to developing countries, where billions of people have no access to financial services at all.
Fintech for the unbanked
The world’s 2.5 billion “unbanked” and 200 million small businesses without financial services exist mainly in Africa, Latin America, Asia, and the Middle East. Of unbanked individuals, 1 billion have mobile phones, meaning for many, financial mobility could be right around the corner.
Bill Gates has notably written that “in the next 15 years, digital banking will give the poor more control over their assets and help them transform their lives.” In other words, fintech will be life-changing for those lacking the basics.
Mobile payment is a fast-growing industry in the developing world. As more initiatives than ever are aiming to provide new populations with mobile technology and internet access, fintech lets those new to the mobile world transfer funds, apply for loans, and manage money digitally.
There’s already at least one massively successful example of this: M-PESA, which began in Kenya. Now regarded as one of the most successful money transfer services, it’s used by over 12 million people in 10 countries to send and receive money and pay bills by mobile phone.
Though many dismiss the unbanked as poor, they actually hold an enormous amount of value ($9.3 billion) in property. Fintech, which can digitalize records of transactions, ID, ownership, credit ratings and more, has a chance to bring people out of the shadows and into the global economy.
Mobile-friendly fintech can circumvent ATM machines, physical banks, and credit cards, improving quality of life through financial inclusion. It also saves the developing world money by cutting expensive transfer fees: for example, a 5 percent cut of transfer abroad fees could save $16 billion a year.
As more fintech platforms emerge, their ability to act as a social good becomes even clearer. When this type of technology becomes available to people of all countries and classes, everyone from rural tea sellers to Wall Street investors can gain more control over how they use, make and spend money every day.