APPAM’s FinTech for Financial Inclusion (APPAMF4F) Twitter Chat with Prof. Terri Friedline.

DARAMOLA ADEBOLA
Nov 4 · 6 min read

As part of the Financial Inclusion Week 2019, the FinTech for Financial Inclusion (APPAMF4F), one of APPAM’s Affinity Communities, held a Twitter Chat. The host was Adebola Daramola, a PhD Public Policy student at the University of Maryland, Baltimore County (UMBC), Maryland, and the Guest was Professor Terri Friedline of the University of Michigan School of Social Work, Michigan.

The Twitter Chat was held on Monday Oct 21st, 2019 between 1:00 pm — 3:00 pm (EDT), using the following hashtags #APPAMF4F , #2019APPAM , #FininclusionWeek.

Find below the slightly -edited conversation between Adebola and Professor Terri Friedline.

Adebola

Q1: It’s good to have you Prof.Terri Friedline as our guest. Kindly share with us briefly your research and policy work on FinTech and Financial Inclusion.

Professor Terri Friedline

A1: Hi all! Thanks so much for having me! I’m very excited about this work & your (Adebola Daramola) leadership for the APPAM’s FinTech for Financial Inclusion. A goal of my research is to ensure that people have access to the financial products & services they need for dignified participation in today’s economy. Especially for marginalized groups blocked from & exploited by the financial system. And, as banking goes digital, this means making sure that people have the technology for financial inclusion.

Adebola

Q2: What about historically financial excluded communities? How much limited access do they have to financial services?

Professor Terri Friedline

A2: Unfortunately, there are big overlaps between the digital divide & the financial divide. This doesn’t mean that Fintech doesn’t have some potential; BUT without attending to these mutually constitutive divides, many people will be left out of a fintech revolution. For example, rates of high-speed internet access are pretty low. In some Black rural communities, 70% or more of residents don’t have broadband internet.Its hard to use online banking without this most basic technological tool. And each year, approximately 40% of low-income households fall behind on utility payments & 14% have their utilities disconnected. People are in jeopardy of losing access to their money when their phone services are disconnected (Link).

credit: Microsoft On the Issues

Q3: You mention the divide, with the black communities example. Kindly give us more insights into the state of mainstream banks and AFS services to these communities of color, lower-income and rural communities in the US?

Professor Terri Friedline

A3: Banks and Alternative Financial Services are part of a continuum of financial services in communities. Banks are more abundant in white communities and harder to find in Black and Brown communities. My colleagues & I demonstrated these spatial dynamics in our project ( the Mapping Financial Opportunity).

Even when banks are in Black and Brown communities, their services can come at a price. An advantage of whiteness is less costly financial products & services: a checking account’s minimum balance is only $625 in white communities vs. $871 in Black communities ( Link). In addition to paying higher checking costs and fees at banks, payday lenders and check cashers target Black & Brown communities for 400% interest rates (Link).

Adebola

Q4: Prof. Terri Friedline, interesting insights you’ve shared. You mentioned the Mapping Financial Opportunity project, share with us briefly the the most surprising findings.

Professor Terri Friedline

A4: The Mapping Financial Opportunity project had several objectives. To visualize racism & classism in financial services, we mapped the spatial landscape of banks, credit unions, & AFS relative to race & poverty. And, we knew financial services were more than just their physical locations. How much do they cost? So we surveyed approximately 1,700 banks nationwide about their costs and fees. We also knew that banking was going digital. So we investigated the spatial landscapes of Fintech: high-speed internet access, smartphone ownership, online & mobile banking (Link).

Terrible but not necessarily surprising findings included: high segregation of banks, AFS & high segregation of Fintech.

There’s so much promise being placed on Fintech, but many, many people — low-income whites, Black and Brown folks — have limited access to these important financial tools.

Adebola

Q5: So are there opportunities for Fintech to increase the financial well-being and inclusion of American households and communities beyond what we currently have?

Professor Terri Friedline

A5: Yes, and with caution. Chris Gilliard & Tressie McMillan Cottom have used the term digital redlining.

And Ruha Benjamin, Tamara Nopper, Safiya Noble, Desmond Patton, & Virginia Eubanks are helping us think better & deeper about society’s reliance on technology.

As banking goes digital, who stands to benefit? Who will bear the burdens of negative, unintended consequences?

Just as Fintech — from mobile banking to blockchain — increases possibilities for financial inclusion for some, there may be detrimental consequences for others. We must pay attention to that if we want Fintech’s potential to be realized.

Otherwise, we’ll recreate redlining in digital form — something that Tamara Nopper argues we’ve already done with credit scoring.

Adebola

Q6: One of your paper is “Unequal FinTech Landscapes”, you spotlight the untapped institutional knowledge among underserved communities for new #DFS solutions. What is your policy recommendations?

Professor Terri Friedline

A6: I just read a great article the other day: Black researchers leading the call to ethics in technology. The authors offer recommendations about teaching racial equity in technology (Fintech), leading with ethics, which are compelling alongside societal technological advancements.

The question about policy recommendations is big — what can we do on a macro, societal level to address these issues?

In my opinion, we should take several approaches to policy: (1) take immediate, sometimes incremental policy changes , (2) work toward the vision for the Fintech future that we want to see — equal, equitable, dignified, democratized, public.

There are immediate policy changes: incorporating Fintech into CRA regulations, making real time payments, ensuring the internet is free & Net Neutrality. But we can’t stop with immediate or incremental policy changes.

We absolutely must stretch our imaginations and the bounds of what is politically possible = align our policies with a vision of Fintech that democratizes, equalizes finance instead of recreating digital redlining & advancing marginalization.

Adebola

Q7: Based on these policy recommendations, what are the areas you envisage more academic research?

Professor Terri Friedline

A7: Our conversation today has been about Fintech on the “front end”: a household’s access to broadband or how a bank customer uses online banking. And more research in these areas is absolutely needed!

I would also love to see researchers taking on Fintech from the “back end”: how banks use Fintech to speed up their transactions (& racial capitalism), scrape borrowers’ information for applying loans, etc.

Banks, hedge funds, global corporate landlords, etc. are using Fintech for their operations, and I would love to see more researchers investigating the implications of these activities.

Adebola

Q8: In conclusion, as we prepare for the 2019 APPAM Annual Conference, what are your expectations for the FinTech for Financial Inclusion (APPAMF4F) affinity gathering?

Professor Terri Friedline

A8: I’m so glad the FinTech for Financial Inclusion (F4F) is part of the 2019 APPAM Annual Conference. In my experience, affinity gatherings do just that = let a group of folks with similar interests network together.

It is great if there are immediate outcomes or outputs of the FinTech for Financial Inclusion (F4F).

In my experience, affinity gatherings have been opportunities for me to meet other scholars in the field, develop new colleagues, identify areas of alignment with others. I have remained connected to many of the folks I met at affinity gatherings earlier in my career, and I now benefit from learning the new questions and possibilities raised by early-career scholars.

So, my hope is that attendees have these opportunities!

Finally, the 2019 APPAM Annual Conference is here!

Join like -minded individuals & institutions to attend 2019 APPAM Fall Research Conference.

Also, make it a date with the FinTech for Financial Inclusion (F4F) affinity community on Saturday, November 9, 2019: 8:30 AM-10:00 AM.

https://appam.confex.com/appam/2019/webprogram/Session13417.html

DARAMOLA ADEBOLA

Written by

PhD student, School of Public Policy, UMBC. I have interest in Fintech, Financial Inclusion and Regulatory Innovations.

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