With three billion people left out of the formal financial sector, financial technology offers us a chance to reach greater scale than ever before. Entrepreneurs and financial institutions are all exploring new ways to use technology to reach more people. Data, analytics, machine-to-machine learning, the Internet of Things, blockchain, global satellite imagery – all offer the chance to help reach people who have so far been left out.

Though tech is critical, today, some human touch is still needed in almost every financial product, service, or market. This will continue to change as more people become increasingly comfortable moving from touch to tech – but that’s a journey that will take time, patience, and close attention to evolving customer preferences.

Every company is wrestling with this issue, including Accion and our portfolio partners. There’s no single answer to how to best balance tech and touch; moreover, today’s solutions will evolve in the future. Entrepreneurs must constantly re-evaluate and re-calibrate their solutions to keep up with customers’ preferences and the changing state of technology.

Accion Venture Lab’s latest report, The Tech Touch Balance, explores how inclusive fintechs around the world are grappling with this issue. Pulling from our insights advising startups around the world and with the support of the Mastercard Foundation, our latest paper addresses a series of complex questions, helping entrepreneurs and investors think through:

  1. Why do some customers sometimes still prefer touch over tech? This question is especially important in underserved communities. Customers who are new to formal financial services may have low digital savviness, lack trust in financial service providers, or not fully understand the product. Technology alone can’t always address those concerns.
  2. How do fintech startups decide to use tech or touch? By listening carefully to their customers about their preferences. Asking for and listening to feedback up-front and during product design, then continuing to refine the product over time is essential.
  3. When should fintech startups use an algorithm, and when should they use a lending officer? There’s no one answer: the same organization might use technology to replace human agents during customer acquisition, then use it as a tool to enable representatives during collections. Fintechs must strategically adjust their use of tech and touch from one operation to the next.

There’s no single solution to balancing tech and touch to accelerate financial inclusion. We’re still working through this issue and helping our portfolio companies refine their operations.

Though evolving rapidly, entrepreneurs need to put a stake in the ground. And then, we’ll continue working at it and making adjustments along the way. But if we do – if we continually listen to our customers – then we can refine and improve savings, insurance, credits, and payments, reach more clients, and create a financially inclusive world.

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