One of the major differences between traditional banking and the fintech industry is the question: Who is this for?
On a global scale, banks are for the wealthy: developed nations and people with access to all the necessary infrastructure.
Fintech, on the other hand, is much lighter on its feet, making it much more accessible.
It’s not surprising, then, that the industry is becoming associated with emerging markets, and all the optimism surrounding the good that can be achieved there.
In a recent Forbes article, Elizabeth MacBride offers an insightful look at what fintech can mean for emerging markets, and women in particular.
On the whole, MacBride is optimistic:
“Mobile money infrastructure will be a key to helping the 700 million people living in extreme poverty, and those living with a little more but still not enough.”
She lists several fintech entrepreneurs who are creating innovative solutions for emerging markets and describes the impact they could have.
“They are potentially defining a new financial system, one that may include banks but may not rely on them, one that is less regulated and more accessible, and one that serves as a conduit between the developed world and emerging markets.”
“…cash, meaning money that can flow outside a formal banking system, is incredibly empowering to women. The right kind of financial infrastructure can help women easily start home-based and peer-to-peer businesses or those need other sources of income, or women receiving aid…”
But MacBride raises several concerns about the risks mobile financial options could present for women, including the risk of having that money, or their smartphones taken from them.
She also wonders if the industry will respond to the unique needs of women.
“Many of the entrepreneurs at work on fintech in emerging markets are … building out the infrastructure to enable not only growth in their societies, but to enable a global transfer of resources from the wealthy world to the poor world. The question is, are they building the infrastructure to serve everyone?”
“Will women want different services from these mobile money companies — like options to spend or share differently? People who doubt that women have profoundly different needs than men when it comes to financial services have only to look at how long it has taken in the United States for financial services to grapple honestly with this question. It’s taken veteran women like Sallie Krawcheck to make a credible attempt. In an interview, Mohamed El-Erian, one of the world’s best investors, the founder of PIMCO and an angel investor in Krawcheck’s Ellevest, called financial service industry’s failure to serve women a market failure.”
The answer to this, according to MacBride, is, “Not yet,” and maybe not for a long time.
View the full article here.