Fintech is not just a sales puff; it’s innovation that makes a change. One of the proofs for Fintech are the Underbanked as the industry aims to give customers a new perspective for banking.
The New Ideas
One of the trendy focuses of the Fintech industry remains the underbanked community – people or businesses that have a poor access to mainstream financial services. Fintechs aim to become the “enabler of economic inclusion” by providing the basic mobile banking services to those who need them. The companies become champions by advocating for transparency and disclosure in banking. While until now fees and charges drained the underbanked, Fintechs are providing faster and most importantly cheaper services, giving the companies many new opportunities. Furthermore, by having the technological solutions, Fintechs are allowing more people to access financial services and open bank accounts.
According to the World Bank Group, around 2 billion adults (42% of the global adult population) are “absent from the formal financial system.”  In the United States alone, 88 million underbanked Americans or 20% of all households are waiting to be included in the system. It’s not only individuals, however, that are in need of financial inclusion. Small businesses account for 54% of all sales in the United States and are also in need of financial services. Here come the good news for the underbanked: Between July 2012 and June 2013, the investment activity in Fintech companies for the underserved in the US amounted to more than $5.2 billion. This activity shows a promise that Fintechs are here to grow in the dynamic financial industry and serve the underbanked community.
Many Fintechs around the world have taken part in the inclusion of the underbanked. In Southeast Asia, Xfers is becoming the new PayPal by creating a payment network in addition to the existing bank accounts that people have. Another Fintech called GetSaida is focusing on the underbanked communities in developing countries through analysis and eventually small consumer loans. FinLeap’s venture solarisBank focuses on digital businesses and helps them eliminate barriers by providing an easy-to-implement banking API. BLAK Fnancial Technology helps customers get a debit card attached to a real bank. LearnLux uses tools to help millennials have the financial literacy they need. The list continues as more and more companies focus on creating services for the underbanked – a step ahead for both the financial industry and customers.