Jordan A. Fabbri
In the fast-paced realm of finance, the emergence of fintech has sparked a transformative era marked by unprecedented convenience, accessibility, and innovation. This groundbreaking force within the financial industry has not only changed the way we manage money and conduct transactions but has also emerged as a catalyst for promoting financial literacy and inclusion, as well as equal opportunities on a global scale.
Recent reports and discussions at the Arab Fintech Forum indicated that around 2 billion people worldwide are ‘unbanked’, meaning that they lack access to formal financial services. Additionally, as many as 200 million micro, small and medium-sized enterprises in growth markets have been reported to have zero access to savings or credit, while those that do often pay exorbitant fees for a limited selection of products. Representing a paradigm shift in the financial industry, fintech transcends geographical boundaries, democratising access to financial services and providing equal opportunities for all.
Fintech companies have been instrumental in promoting digital payment options and reducing the need for cash transactions.At present, individuals can conduct financial transactions more quickly, securely, and conveniently thanks to mobile wallets, UPI-based apps, and contactless payment options.With the introduction of digital banking solutions, fintech has successfully reduced conventional barriersof financial services. People can seamlessly access financial solutions and services regardless of their geographic location with the help of internet and mobile banking technologies. Those who live in rural regions with very few physical banks benefit more from these innovative solutions.
One of the key factors that contribute to eliminating poverty and enhancing prosperity is financial inclusion,according to the World Bank Group. In Africa, Asia, and the Middle East, around 1.2 billionadults use formal or semiformal credit or savings products. Of these, almost 800 millionindividuals survive on less than five dollars each day.
Institutions offering a range of superior, reasonably priced financial products and services sets forth promising possibilities for the underservedpopulation. With necessary financial education, lower-income customers can access credit, savings, insurance, and payment products that help them invest in economic opportunities, manage their money wisely, reduce risks, and make plans for a more secure future. Approximately 26 per cent of the adults in the Middle East utilise formal or semiformal financial services, whereas 67 per cent of all adults do not use these services. [1]
Lending platforms powered by fintech are revolutionising the regulations associated with access to credit. By utilising advanced algorithms and other relevant data sources, these platforms are able to evaluate the creditworthiness of individuals that conventional financial institutions may otherwise overlook. This inclusivity empowers those with unconventional financial profiles or limited credit records to receive loans and participate in the economic activities.
Additionally, fintech has further redefined the concept of microfinance by offering small loans and other financial services to individuals and businesses in developing nations. Fintech-driven microfinance institutions are currently reaching previously disadvantaged individuals through digital platforms and mobile applications, encouraging entrepreneurship,and facilitating economic growth.Among the many, one of the most prominent factors supporting financial inclusion has been the emergence of digital wallets. These wallets act as a gateway to financial education in addition to offering a safe and convenient way for managing money.Fintech companies usually incorporate educational materials and resources into their applications, empowering users with the complete know-how and abilities required for efficient money management.
Fintech’s steadfast dedication to innovation and excellence has paved the way for unique solutions that address the specific requirements of various demographics. The sector has beenproactively making efforts to make financial services accessible to everyone around the world, from voice-activated banking for visually impaired individualsto simpler user interfaces for people with limited digital literacy.The financial environment of the present places a high premium on education, and a number of platforms and events currently encourage adopting fintech to foster inclusion and enhance financial literacy.
The thoughts and views expressed are the author’s own.
