FinTechs driving financial inclusion through innovation
As it’s June, a month celebrating diversity and inclusion, Eliga wanted to cover some of the most inspiring labs and FinTech companies accelerating growth with community-informed products in credit, insurance and digital banking.
FinTech plays a vital role in closing gaps because it can adapt to consumer needs quickly, moving and testing to improve users’ financial health. More importantly, FinTech companies can address systemic inequalities that affect underserved communities. It is crucial businesses focus on building users’ financial resilience as the world starts to recover.
In 2019, over 3 million people in the UK relied on high-cost credit to help them get their finances under control. According to John Glen MP, Economic Secretary to the Treasury, ‘Bold ideas and innovation have already transformed the way we bank, as well as how we work and how we talk to each other.’ He called for easier, safer and cheaper ways to access credit through tech innovation. The Affordable Credit Challenge was a significant step in the right direction. Now, two years on, Nesta, turns its attention to helping the UK recover.
UK FinTech companies helping with recovery
Nesta and its partners took significant action in reaching the Rapid Recovery Challenge's goal of helping people improve their career and financial prospects after a difficult year. The £2.8 million challenge is funded by Nesta, in partnership with JPMorgan Chase Foundation and Money and Pensions Service. Last month, Ravi Gurumurthy announced the six finalists invited to focus on scaling their products ‘to the people whose lives and careers have been blighted by this pandemic.’ Below are some highlights from Nesta's post. To see the full list of finalists, click here.
Hastee enables employees to access their earnings on-demand. The platform improves the productivity of workers and organisations, relieving financial stress and helping employees avoid high-cost credit. It also offers a personalised financial education tool that is free for users aged 16-24.
Turn2Us is a digital grants delivery platform with a helpful Benefits Calculator. Users can access quick financial support by improving the grant process. The company dramatically reduces waiting times for financially vulnerable applicants. It allows applicants to safely and quickly apply through leveraging identity verification, open banking and anti-fraud technology.
US FinTech companies helping with recovery
Across the pond, Financial Solutions Lab Accelerator released its 2021 cohorts at the end of May. The lab helps communities address systemic difficulties like building credit through traditional credit scoring models, limited savings and investment structures centred around 'LMI' needs. Below are some highlights. To see the full list of cohorts, click here.
Daylight offers the first and only digital banking platform customized to the needs of LGBTQ+ people. Despite having over $1 trillion spending power in the US, more than half of LGBTQ+ people struggle to maintain regular savings. The platform offers 'different timelines, different kinds of families, different goals and different futures.'
Esusu is a rent reporting platform, which allows users to build credit through rent. Over 45 million people in the U.S. are credit invisible. This means there is no data on their file with the three major credit bureaus. Without a credit score getting access to apartments, mortgages and car loans can be challenging for people, who cannot demonstrate their credit-worthiness.
Everyday Life insurance helps remove barriers like high premiums, complicated products, and opaque underwriting, so more people can protect their families. While coverage may be out of reach for many American families due to cost, this company uses Predictive Protection™ which saves users thousands of dollars by not overpaying for insurance they don’t need as they age.
Home Lending Pal is an AI-powered mortgage advisor, which removes all the guesswork out of qualifying for a mortgage. 'Kev' analyses thousands of data points to find the most affordable mortgage options for users, uncovering hidden mortgage and closing costs. The company uses artificial intelligence and blockchain to improve the mortgage lending process for underserved first-time home buyers.
Taking small but significant actions
Eliga Services recognises that each of us has a part to play in creating an inclusive and welcoming environment in the offices we work at or the technology we build. We can help by listening to those who may have different experiences from us for better (and fairer) decision-making. By acknowledging that we’re all unconsciously biased, we can take small, but significant actions. These companies are an excellent starting point for greater inclusion in FinTech. By promoting community-led products and services, we hope to highlight their efforts and start a dialogue.