Innovative technology to offer banking facilities to marginalized people

FinTech Applications: Innovative technology to offer banking services to marginalized people

Representative image. CNBC TV 18

The term “unbanked” refers to those without a bank account or access to financial services. Most of the unbanked only use cash, and many do not have insurance, pension or other safety net often associated with having traditional savings and retirement accounts.

Several fields of financial data are required to produce credit scores. When that is not available, it is impossible to build a complete picture of the economic behavior of the segment.

Unfortunately, this makes the “unbanked” population invisible to traditional banks. This reveals the need for innovation in the financial services space to disrupt the current financial system and make it more inclusive.

Until recently, market realities like this prevented the unbanked from accessing the services they needed.

FinTech companies are tackling the current inequality in financial services, striving to level the playing field. They operate outside the confines of traditional finance and dramatically improve accessibility for the unbanked.

And since FinTech companies are powered by data, solving these problems for the unbanked also opens up new possibilities by generating valuable data on the income, spending habits, needs and wants of this consumer segment. FinTechs are revolutionizing the financial services industry by taking a new approach to an old problem.

Economic patterns are a powerful discovery tool, and by leveraging data that simply wasn’t previously available, FinTech companies gain influential insights to help clients succeed. This drives innovation that can deliver highly personalized and efficient services beyond even banking, facilitating a total lifestyle revamp.

FinTech companies are able to build a complete picture of the economic behavior of a client. This places this sector in an ideal position to build an alternative to an archaic system, creating personalized financial products based on a comprehensive customer journey account. This allows for better and faster decision making and more agile pricing than incumbents.

The increasing penetration of the Internet and online banking capabilities allow fintech companies to penetrate remote areas where physical bank branches cannot be established. By providing access to even basic products or services, such as savings or financing instruments, FinTech companies enable people in remote areas or low-income, unbanked people to save, grow their money, and take advantage of programs and government assistance.

Unlike traditional banks, FinTech companies require minimal paperwork to lend. This makes borrowing from them much simpler and faster. FinTech companies are also using AI for risk assessment of customers with limited or no credit histories; assessments based on indicators such as patterns of income and expenses. This gives low-cost borrowers and local businesses access to microfinance services for major purchases and capital investments.

FinTech companies can rapidly deploy new features and products by testing new innovations in secure environments while verifying compliance with government regulations and data security. This allows FinTech companies to offer innovative products and services in a faster and more secure way.

Fast and secure digital payment modes are also available through FinTech innovations. The use of AI allows FinTech companies to verify and transfer digital payments instantly. Online payment modes provide more flexibility, convenience and ease, increasing access to essential goods and services for all.

FinTech can solve problems related to the storage and transfer of value, as well as help the unbanked and unbanked population to become more financially included.

We believe that blockchain technology and fractional ownership have solved the problem of moving stored value digitally. Real estate, works of art, and commodities like gold all have a set underlying value. The ability to own and trade fractional shares of those asset types has the potential to be more than disruptive to the traditional financial services industry. For the unbanked, it could be transformative.

FinTech paves the way forward, serving the world’s unbanked by acquiring data that leads to solutions that are instant, stable, secure, and sustainable. Revolutionizing the way companies will serve these customers in the future.

The author is the CEO and Co-Founder of PaySprint, a Fintech company focused on Next Gen Neo banking solutions, offering a unified open API platform.

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