How to build intrinsically inclusive products in Fintech?
Historical actors in the industry offer standardized financial services and often do not address the specific needs of minorities, thus making it more difficult for them to access finance services
User Experience on Money 20/20's website is really smooth and nice. But one thing is striking when you keep yourself posted on the tech scene in Africa and South America, there is no mention of these fast-pace emerging continents.
Although access to banking and finance services is taken for granted by most citizens in developed countries, financial services are indeed not often adapted and/or accessible to specific group of people, i.e. edge cases. Historical actors in the industry offer standardized banking and financial services. They often do not address the specific needs of minorities, thus making it more difficult for them to access finance services.
Once we observed this, which strategy can companies implement to improve inclusivity of their financial products & services ? Listening to fintech founders that designed their products for inclusivity, 2 main strategies stand out.
Turning customers' specificities into a competitive advantage
One way of interpreting inclusivity in fintech is to design and build products that answer niche needs, allowing specific communities - or types of customers - to access financial services they were previously (sometimes only partially) excluded from by acknowledging and claiming their specificities.
Panelist Billie Simmons co-founded Daylight, a bank for LGBT customers. Her goal was to create a bank that would offer customized banking services to LGBT people needs, in order to tackle their specific stakes: "different timelines, different kinds of families, different goals, different futures". In the US, more than half the LGBT community struggles to maintain regular savings. Billie Simmons claims that they are financially disadvantaged by the nature of their identity as they usually earn less money, have more difficulty getting mortgages and face expensive one-off costs, for example surrogacy. She wants to solve the lack of awareness about these financial barriers, which also explains the absence of financial products built for them (among other causes).
Until Daylight. Billie Simmons wanted it tailored for LGBT people, who are now offered most banking services with customized features, including the possibility to use the name you choose on their debit/credit card - as opposed to the name on their ID - and a community feature allowing Daylight customers to discuss and share savings goals or achievement. Daylight claims its product is inclusive because its design is based on LGBT community specific ways of life - known by founders as they are part of the community themselves - but also because it is open to everyone who abides by their values - on top of which inclusivity.
In this case, inclusivity is achieved by addressing the very specific needs of a very specific target with a tailor-made finance product aimed at creating a pathway to finance services for a given minority. According to Daylight, leveraging the very specificities of the LGBT community is what will allow inclusivity of finance services.
Anonymise to protect customers' identity and prevent discrimination
Another way to interpret inclusivity in finance - which is the opposite of the strategy we just mentioned supra - is to design fintech products that protect users from discrimination by allowing them not to compromise the information they do not want - and often do not need - to provide.
This strategy is based on the observation that many minorities are excluded from finance services due to discrimination. Almost all financial services are granted after identity verification and authentication. Unfortunately, this can engender discrimination against specific groups of people, who can face difference of treatment after revealing their identity to a particular finance service provider. Therefore some fintech companies emerged with the objective of helping customers becoming owner of the data they want to share and those they want to keep private if it is not relevant to access a particular financial service.
The second panelist at our conference - Khalid Maliki - founded Tykn, a web-based verifiable credentials wallet API. They provide companies with a secure and regulation compliant solution to check the identity of their users. Tykn wants to make digital credentials tamper-proof to be able to replace physical identity documents for identification. The end users of their wallet will be able to identify themselves and subscribe to any service, in a secure and trustworthy manner. Khalid Maliki claims his product is inclusive by design in several ways. First, it allows users to share only the information that is required to identify themselves for a given service. Therefore, they can avoid risks of discrimination - at least part of them. Then, it is also a way to provide reliable identity populations who are excluded from many basic services because they do not have identifying documents - for example refugees. There are about one billion people who do not have proof of existence in the world, which prevents them from accessing finance services but also education or healthcare. Tykn aims at including them.
Technology by itself is not biased. Bias and discrimination are build in by human beings. We showed through the article that technology can also be a great way to provide financial services in a more inclusive way. There are several ways of building more inclusive products. What does all these strategies have in common ? It's that the willingness of inclusivity has to be included very early in the ideation of the product and not seen as an "add on" in the product.
There will always be edge cases and challenges in matter of inclusivity. Fintech actors have a role to play, they can become enablers and facilitators for discriminated minorities. Step by step, they can transform the ecosystem and make it more inclusive, by bringing edge cases into mainstream.