I was just reading a fantastic article by John Boitnott, 8 Ways Financial Technology Will Evolve in 2016 (well, I had to go easy on the Christmas turkey helpings and find something interesting to concentrate on!) and one thing that I agree with is the concept of educating consumers into making smarter decisions. The consequence of this education is the widening of financial inclusion, which a lot of people see as one of the directions that Fintech will take in 2016.
Financial inclusion catalyst
John Boitnott’s take on financial education:
No one wants a repeat of the last financial crisis when organizations fed the bad spending habits of consumers. Rather than offering multiple equity lines of credit and free credit cards, the future is all about helping consumers make smarter financial decisions, encouraging them to save money and presenting more financially sound as well as understandable investment strategies.
Helping consumers accomplish their goals is what FinTech companies like PlanWise are accomplishing. PlanWise provides tools and educational format to help consumers evaluate their financial status and offers recommendations on improving personal habits.
NerdWallet doles out a lot of free advice and information that can help consumers make better choices about how they spend, borrow, and save their money. This is especially helpful for educating younger consumers, including students who may be considering loans and may face debt in the future.
Financial inclusion in 2016
The biggest barrier to financial inclusion has always been the inability to explain how technology addresses need especially for the unbanked and under-banked. Easy-to-understand will mean an engaged participant and user. 2016 will see financial inclusion underpinning a lot of innovations in Fintech. The unbanked as a segment has of late been the focal point of discussion for the payment industry and banks. The payment sector within the Fintech space will see increased investment covering financial education. Historical attempts to venture into financial inclusion were always seen as a corporate social responsibility gimmick.The financial inclusion imperative will drive digital banking innovation in 2016.Click To Tweet
In the past, startups pushing financial inclusion have seen very limited investment and consequently have also had minimal impact. 2016 will definitely see financial inclusion being promoted globally and Fintech startups scrambling to position better position themselves to take advantage of a previously underdeveloped market.
Which startups do you think are poised to take advantage?