Financial technology (FinTech) solutions are poised for an exceptional year in 2019, particularly with new solutions designed to assist the unbanked and underbanked populations.
According to media sources, there are believed to be an estimated 1.7 billion adults across the globe who do not currently enjoy access to traditional financial services. This equates to 31% of the adult population who are not currently leveraging financial services, products and benefits from a traditional bank account.
This means that 31% of the world’s adult population cannot borrow money, formally save funds, or invest finances. They are simply not able to gain access to the global money system that allows for economic empowerment. What’s worse, because of their limited means to financial services, their current options are very predatory in nature when they do need access to cash or funds.
Empowering People Globally
Financial services are also key to empowering certain groups of people, age groups, and specific populations such as women. Financial services pave the way toward escaping poverty, as well as offering economic independence, growth and balancing inequality. With greater financial options, women gain economic empowerment and stronger financial decision-making, as well as important tools to invest in personal or family livelihood.
Unbanked and underbanked typically pay their bills in cash. If they need to borrow money it is usually from a local money lender at an elevated interest rate, and the vast majority of this population pay steep interest rates when they are able to secure a line of credit, especially from a retailer.
Unbanked and underbanked does not mean that they are poor, yet they do not meet the minimum requirement for opening an account, nor do they have any credit history and assets to support a loan. Traditionally, these individuals have been serviced through financial products such as microfinance, vouchers, prepaid or stored-value cards, and rechargeable cards – none of which offer the same opportunities for a full financial experience.
Where Will FinTech See Disruption?
Innovative FinTech solutions in 2019 may help. Providers of FinTech solutions are poised to offer a complete SAAS-based financial ecosystem that delivers virtual bank-like services to the unbanked and underbanked of the world without the need for a traditional bank account. These providers can even build these offerings around digital wallet apps that are accessible through either mobile phone or computer, and allow users to make online purchases, as well as to transfer money, pay bills, and deposit money, all without requiring a traditional bank account or credit check.
These can also be tied directly to a prepaid Mastercard credit card, allowing customers the ability to spend their money online, or at retailers worldwide.
The Role Mobile Will Play
Furthermore, technology and mobile communications will continue to play leading roles in FinTech solutions for unbanked and underbanked populations in 2019. The continued proliferation of mobile usage is a leading reason why. Media estimates show that roughly 66% of the global population of unbanked adults have access to a mobile device. This is crucial since many of today’s financial tools and offerings for this population are driven by mobile technology and advanced apps that deliver new financial ecosystems to these individuals, enabling even more adoption of broader services.
Today’s innovative providers are developing financial ecosystems that will help lead the cashless revolution, and aid people who have been unable to get a traditional bank account.
All of this innovation of financial service offerings means these populations will no longer have limitations when in need for financial services, securing loans, transferring funds or making purchases, and they will be able to enjoy the same financial freedoms offered by traditional financial service providers.
Editor’s Note: Stephen Harkey is the Chief Marketing Officer of ViViPAY, a subsidiary of ViVi Holdings, a U.S.-based “FinTech” financial technology company that has developed a complete ecosystem of financial solutions and is committed to the digital inclusion of basic banking services for the entire population. It aggregates the branches of technology, telecommunications and payment processing in one cohesive, intuitive platform that uses “AI” Artificial Intelligence and Private Blockchain technology to guarantee security.