While fintech innovations have long promised a fairer and more inclusive financial playing field, the culture is still working through some institutional prejudices that often leave people behind.
On the Converge podcast, we recently hosted two leaders at the forefront of diversity and inclusion in fintech: Naré Vardanyan, co-founder of Ntropy, a financial data standardization and enrichment API; and Nicole Casperson, founder of the Fintech Is Femme newsletter and host of the Humans of Fintech podcast.
Finding a niche to serve customers
The fintech revolution has led to automation and the ability to cut people out of transactions to make them quicker and more accurate. Regardless, it’s still one of the most human-friendly areas of financial progress over the past decade. Casperson notes that fintech solutions can be uniquely suited to empower both customers and entrepreneurs without too much disruption to legacy institutions.
“People still want to work with a human when it comes to their money,” Casperson says. She adds that it’s on customers to decide which financial partners they want to work with, whether it’s a neobank or credit union.
“Culturally, finance has become mainstream because we have these devices that people can now connect,” Casperson says. “Now it’s oversaturated, and people have to find a niche.”
Vardanyan and Casperson both agree that regulations and standardization could propel the industry forward in a manner that favors consumers and businesses; however, the fast progress within the sector has led to challenges. Rapid advancements can sometimes cause governments to overregulate in response to a negative incident, which can have a limiting effect on positive progress, Vardanyan says.
“In the last couple of years, there has been a lot of innovation but also a lot of scares,” Vardanyan says.
A focus on financial inclusion
Perhaps the greatest potential of fintech lies in its ability to deliver financial services to segments of the population that traditional banking models have historically overlooked.
For example, Vandanyan notes that female entrepreneurs have had an unfairly hard time getting business loans even with highly promising underlying ventures. It can also be harder for lenders to quantify risk when the applicant doesn’t have millions of dollars in savings, so big banks tend to disqualify smaller businesses, Vandanyan says.
Through AI and automation, though, loan officers can look at much more data when calculating someone’s creditworthiness to make a more informed, unbiased decision, Vardanyan says.
From consumer-friendly mobile apps that help new products shine to publicly available financial records, Casperson says fintech has empowered society to give more credit to those who deserve it. This path toward financial inclusion also requires boardrooms to be open-minded about new technologies and practices.
“Maybe we can change the way we do business by changing the way we think… ‘How are we protecting the consumer rather than protecting the status quo?’” Casperson says.
Want more insights on the topics shaping the future of cross-border payments? Tune in to Converge, with new episodes every Wednesday.
*The information shared on this blog is for informational purposes only and should not be considered financial advice. Please note that the opinions expressed on Converge are solely the opinions of the host and the guests, not Convera’s.
