In 2018, people filed more than 10,000 Americans with Disabilities Act (ADA) Title III complaints against businesses in the United States, including many financial institutions, like Bank of America, H&R Block, and Charles Schwab. The ADA prohibits businesses from discriminating against anyone with disabilities. For financial and banking institutions, this means, among other things, that their services must be equally accessible to people with and without disabilities.
Of course, people with disabilities aren’t the only segment of the population that has a disadvantage when it comes to banking. Around the world, people who are in low economic brackets, come from minority backgrounds, or reside in particular areas are also underserved. But software developers and financial institutions are now aiming to address this problem through Fintech, an umbrella term describing digital financial services and solutions.
1) Easier vehicles for securing loans
Many people and businesses have trouble securing loans because of low credit scores or a lack of a credit history altogether. But thanks to Fintech, there are now apps and other services that look at factors beyond credit scores to facilitate lending. Tala is one such app. It combs Big Data, including social connections, bill payments, and cell phone usage, to assess the lending worthiness. Not only does this facilitate loans, but it also helps users build their credit.
Fintech has also made peer-to-peer (P2P) lending easier. Apps like Venmo, for example, eliminate the banking institution intermediary and allow people to borrow money from and make payments to their friends without having to pay high-interest rates or transaction fees.
2) Lower transaction costs
Speaking of lower transaction fees, e-payments are reducing these costs, too. This can be especially useful for people who need to make bank transfers, such as those who are working for businesses in countries in which they don’t live. Not only are these options less costly, but they also reduce wait times for the money to appear in the holder’s account.
For example, back in 2007, Vodafone established M-PESA in Kenya. Users can pay businesses and peers by sending a phone-generated “quick code.” There’s no need to download an app, so people who don’t own smartphones can use the service.
3) Increased banking access for the disabled
People with different disabilities have more accessibility thanks to a variety of Fintech software products and features. For example, people with physical disabilities that make it difficult or impossible for them to go to ATMs or banks to deposit checks or make payments can use mobile banking platforms instead.
Another helpful feature allows people with visual- or reading-related disabilities to use banking services from the comfort of their own homes. They can use a touch-screen feature on some platforms to hear a description of the button they’re clicking and double-tap it to select the option.
4) Easier banking options
Aside from mobile banking, there are plenty of new alternatives to the traditional brick-and-mortar financial institutions that are making banking easier for people. One such development is the interactive teller. This machine resembles an ATM but performs many more services that would normally require a human to handle, such as offering advice — the customer can connect with an actual teller remotely via live video.
This option is especially helpful for people who work long hours and can’t visit a bank during its hours of operation, those with disabilities, and people who live in rural areas.
5) Better access to financial advice
Some people, such as those in lower economic brackets or with less education, have limited financial awareness simply because they lack access to resources many others have. But Fintech has a solution for that, too. Artificial intelligence (AI) facilitated the development of robo-advisors, who can communicate with consumers in real-time, offering financial advice and more. An example is a chatbot, which “talks to” the customer through online messaging.
For now, most institutions that use robo-advisors have humans step in to handle matters that are too complex for the machine to process. In the future, we’re likely to see them become more sophisticated and be able to address issues of increasing complexity.
Fintech has made great strides in making banking more accessible for underserved populations, but there are still more challenges and opportunities on the horizon. For example, a Findex study found that in 86% of low- and middle-income countries, there’s a gender pay gap of more than 5%, and a larger number of men than women own mobile phones. That means that many women in these countries are missing out on the benefits Fintech provides.
Still, Fintech has already impacted many populations that previously suffered from economic disadvantages, and it has the potential to make banking even more inclusive for women and others who still experience financial and banking inequality in the future.