Can the financially underserved trust fintech?

Restaurateur Chief Akintunde talking with an employee of Accion Microfinance Bank.

Web Summit brought together leaders from across fintech, impact investing, and social enterprise to discuss how emerging technologies are reshaping the financial sector. But it’s clear that, though we have a number of new tools at our disposal, to create a financially inclusive world, we first need to address a much older problem: trust.

Trust is vital in every aspect of financial services, but it’s most important of all in reaching the most vulnerable people in the world — three billion people left out of or poorly served by the formal financial sector.

My friend, Evelyn Stark from the MetLife Foundation made a helpful analogy. If your employer decided to pay you in Bitcoin, you’d have a lot of questions: how much is this going to cost me? Where can I buy groceries? How do I use it? Who else will use it? That’s what it feels like when we ask people to go from cash to digital. There is fear and uncertainty.

The world’s three billion financially underserved people are as invisible to the formal financial sector as it is to them: they don’t see it, use it, or benefit from it. And it would be no small thing for them to go from a cash-based, informal economy to a digitized, formal economy with mobile payments and e-receipts. The world’s financially underserved would have just as many questions about going from cash to digital as you would have going from dollars to cryptocurrency.

We have to prepare for this and launch products that build trust from the start. In some cases, that’s as simple as accounting for the technical realities underserved consumers often endure, including intermittent electricity, unreliable internet availability, and high costs for data plans. Creating well-designed products that don’t crash, work well, and simply do what users expect them to do is the first step in fostering trust.

But it’s just the first step. We’ll also need to continuously rethink how to balance ‘tech and touch’ to automate back-office operations and respond to users’ customer engagement preferences. And we also need to be aware of — and responsive to — growing concerns about data protection and privacy. Finally, we need to recognize that new consumers may not have the financial capability they need to prevent overindebtedness, and we’ll need to communicate those risks clearly.

All of that begins with trust — with designing high-quality products that put our users first. Delivering those products demonstrates to new users that we understand them and can address their needs. It’s a fundamentally important first step we must take in order to help underserved people and businesses everywhere realize their economic potential.

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