Fintech companies strive to offer customers better alternatives to traditional financial services. However, typical financial services customers are not the only ones they’re helping. Many fintech startups have made a point of helping unbanked and underbanked individuals throughout the world. Providing these individuals with access to banking services, investment opportunities, small business loans, and more can help to promote financial inclusion.
This blog has previously covered some of the ways in which unbanked people have already benefited from the fintech revolution. The following points illustrate how fintech startups can continue to serve such people to a greater degree than ever before. The more that they concentrate on this goal, the more people they’ll eventually help.
Typically, any company that offers a digital product will tend to focus on acquiring users via digital platforms. This simply makes sense. That said, many of the people who are in greatest need of access to financial services may not use digital technology as often as others. Turning people from underserved communities into customers must also involve meeting with them face-to-face in order to establish trust and convey the benefits of a product. This may require more outreach than a typical startup marketing campaign. However, if the goal is to reach people who don’t spend much time using technology due to a lack of access, then it’s a necessary undertaking.
A Focus on Navigating Regulations
Underbanked and unbanked populations are dispersed throughout the globe. There isn’t one particular area that a fintech startup should focus on when trying to serve these populations. Instead, it will be important in the long run to try and bring these products to as many countries as possible.
This isn’t exactly easy. While the fintech revolution has certainly been continuing at a steady pace, there have been some obstacles preventing the industry from growing as efficiently as possible. Fintech companies must navigate the complex regulations applicable to the financial services industry.
It’s important for any company offering financial services to be familiar with these regulations. However, those who run these startups often have more experience in technology than they do in financial services, so they’re not highly familiar with these industry regulations.
That’s one reason why experts often point out the importance of collaboration between banks and fintech startups. Banks can flourish in a fintech world—that is, if they are willing to work with startups.
Traditional banks can help fintech startups to navigate the applicable regulations. Meanwhile, fintech startups can help traditional banks to leverage the power of technology. It’s a win for everyone, particularly for underbanked people in countries where current regulations may prevent fintech companies from operating.
The Power of Data
The specific needs of customers from a traditionally underbanked populations may differ from those who have been using banks for years. Modifying products or services so that they meet the specific needs of users is key to getting more people to embrace them.
After all, due to innovations such as machine learning and artificial intelligence, it’s now possible for digital apps to continuously learn about users’ behavior. Companies use this data to offer personalized experiences.
This principle should also apply to fintech startups attempting to attract underbanked users. Incorporating AI into a product can provide them with valuable information about such customers. Startups that use this information to tailor their services accordingly are going to be more likely than others to meet the needs of people who are just beginning to use financial services.
Of course, while collecting data is an effective method, fintech entrepreneurs also shouldn’t overlook the value of meeting with underbanked people and discussing their needs directly. Again, since they are only now being introduced to financial services, the way they plan on using them may be different as compared to other customers. Startup owners need to learn from them in order to understand what exactly makes their plans unique.
Making a Difference
Fintech companies that serve unbanked populations don’t always focus on them exclusively. Many of these businesses also serve customers who’ve already had access to financial services in the past. Making it their mission to bring financial services to underbanked people is a smart way to please both sets of customers.
Surveys and studies indicate that younger consumers prefer to use products and services from socially conscious brands. A fintech startup that clearly states its plans to help people from underserved areas will appeal to young consumers. Their support will provide such startups with the revenue they need to continue making inroads in unbanked areas.
This should not be overlooked. Fintech companies have a unique opportunity to make a major difference in the world. Following these points is key to doing so.