Fintech as a force for good and a tool to reduce financial inequality

On Tuesday 16th July 2019, FutureBanking launched its series of events which aim to explore how FinTech can be an enabler for increased diversity across financial services. The event was sponsored by the Barclays Embrace Forum and took place at the firm’s global HQ in Canary Wharf.

Kwasi Affum, Founder of FutureBanking and a Vice President at Barclays, opened the event by introducing the two major challenges the Future Banking ecosystem faces:

  1. FinTech startups disrupting business models of large financial institutions – specifically those models where technology is less integrated.
  2. The diversity revolution and Government legislation to ensure businesses are inclusive.

The introduction of UK legislation on ethnicity pay requires companies with over 250 employees, to publish average salary information and identify if there is a pay gap between staff of different ethnicities.

This transparency will encourage firms that meet this threshold and start-ups looking to scale, to be proactive in addressing inequality. It will also allow employees to see how committed an organization is to promoting diversity and inclusion.

As the FinTech sector aims to disrupt banking, greater diversity of thought is fundamental to the future success of financial services – both in terms of securing the talent pipeline and creating products and services that best serve all customers. From a strategic viewpoint, diversity should be a principal objective.

The introduction was followed by an engaging and informative panel discussion about the opportunities and risks presented by emerging technologies.

Genevieve Leveille

Genevieve is an experienced Chief Executive Officer with a background working in the IT and services industry. She has strong entrepreneurship experience as well as corporate experience in Cash, Market Risk, Liquidity Management, Treasury, and Business Transformation.

Reuben Nehikhare

Reuben is a Sales Director at Donnelley Financial, in their Global Capital Markets team. He has experience assisting Investment Banking, Private Equity, Corporate Development & Legal professionals through their deal management process, through a portfolio of cloud-based AI management solutions and technology products.

Filip Jakubowski-Drzewiecki

Filip is co-founding CTO of Loot, a FinTech challenger bank. Prior to this he was a FinTech specialist with experience as a developer, analyst, and project manager.

The Fourth Industrial Revolution

The panel discussed the start of the fourth industrial revolution. They agreed that in the future we can expect 80% of industrial output to be driven by technology and only 20% driven by human judgment. Emerging technologies have the wide-scale capability to replace processes currently performed by humans, increasing the scale and efficiency of production. This is arguably the biggest risk facing communities that are underserved across the world, as many are dependent on manual production inputs to make a living.

Following the last industrial revolution, it took 100 years for global prosperity to return to levels experienced prior. For this reason, the panel agreed that it is important to engage and empower under-represented communities as early as possible, and technology can provide a platform to do so.

How can Fintech help reduce financial inequality?

The responses that came back identified 5 key themes:

  • Improving access/reducing barriers in the ecosystem for founders, users, and employees from a diverse background
  • Targeting specific communities, understanding their needs, and developing products to service those needs
  • Forming technology alliances between FinTech firms, banks, and governments
  • Developing FinTech apps which aim to make a long term impact and avoiding short-termism
  • Building knowledge /educating of decision-makers such as VCs on their personal biases and how this is reducing potential returns

 

Closing remarks – 3 ways to FinTech can help reduce financial inequality

1. Co-design of products

During the interactive session, the panel and the audience agreed that creating tech hubs where we least expect them, is the fastest way to create impactful FinTech which reduces financial inequality. . I.e close to the underserved communities that need greater financial inclusion. In doing so, solutions can be designed by and for the people they intend to serve.

2. Long-termism

While we are yet to reach the peak of FinTech innovation, consolidation is needed to remove duplication of resources in this growing sector. Strategies should be based on the long term and the focus of resources should be where they have the greatest sustainable impact.

3. Addressing the skills gap

Furthermore; minority communities can most benefit from access to financial education, so they are aware of the benefits and risks of different products, and FinTech provides a platform.

Education for future generations needs to be aligned to the skills changes brought about by the fourth industrial revolution.

Political engagement is key as is support for innovators from Venture Capitalists.  This will ensure that the impact of new disruptive technology does not skew the balance of wealth in a negative way.

FutureBanking Conference 2020

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