The term ‘Tech for Good’ covers so many different technological concepts (fintech, healthtech, agritech etc.) but really it’s a catch-all phrase for any tech-led product or service that is designed for the betterment of individuals, business, society or the environment.
The cost element associated with making niche products and services is rising, yet the demand is there and should be met. Therefore making inclusive products and services needs to be a collective mission and can only be done through effective collaboration.
In the last year, we have seen an abundance of advancements in this space, particularly financial services to support underrepresented communities and advance financial inclusion. When it comes to Fintech for Good, what might the rest of 2024 have in store?
Technology widening the path to inclusive banking
Banking has come a long way. Over the past decade, fintechs have repeatedly proved the case that servicing very specific subsects of the wider population can bring in revenue, and more importantly support people to thrive, and in turn, contribute to the wider economy.
Fintechs have also taught bigger institutions that by ensuring products are user-friendly with simplified onboarding processes, plus, understandable UX and UI for customers who do not fit the one-size-fits-all services forced upon them for decades, that adoption will increase and make for stronger brand affinity.
One of the key lessons learned this year is the potential of technology to revolutionise access to credit. Fintechs are leveraging alternative data sources and algorithms to assess creditworthiness beyond traditional metrics. This opens up avenues for individuals with limited credit histories to access loans and financial products that were previously out of reach.
One fintech helping with inclusive banking and access to credit is BuildMyCreditScore – using open banking to allow people to safely build their credit score without the risk of getting into a debt spiral. You can read more here.
Although technology has helped in many ways, it’s equally crucial that people don’t get left behind financially, creating pockets of people who are left unbanked if everything were to go digital. This can only be achieved by prioritising education, which leads us to our next point.
Financial literacy and education
In 2023 a light was also shed on the pivotal role technology plays in enhancing financial literacy.
Educational tools and resources that empower individuals with the knowledge to make informed financial decisions are a necessity to the success of the fintech industry’s penetration into the wider population, and for these services to be seen as real contenders to traditional financial institutions.
Some official numbers may state that customers are not struggling as badly in the current economic climate as previously reported, but charities such as Citizens Advice have, to no one’s surprise, seen a rise in financial distress. It has also been mentioned on panels this year that in reality, those who are considered financially vulnerable have often proved the most resilient as they are used to working within the constraints of their tight budget, balancing their bills and expenses accordingly. This means that those who might previously have been seen as comfortable financially could be in more need of support to cope with spiralling bills and prices.
Education at every level, and no matter an individual’s competency, is critical to the financial success of UK residents as it promotes financial wellness, and can help anyone make smarter decisions no matter their financial standing.
One fintech helping with financial wellness and education is Creditspring which this year has added even more tools to support their members improve their financial literacy, including a Benefits Finder tool. You can read more about the tool here.
Impact Investing and Social Responsibility
Finclusion Week (recognised in October of this year) served as a platform for fintechs to share their commitment to social responsibility and impact investing – two growing areas of focus in the sector.
Ethical lending practices, sustainable financial products, and community-focused projects underscored the industry’s dedication to leveraging fintech for the greater good. Plus, the renewed interest in environmental, social and governance (ESG) amongst funds proved that tech which goes beyond profit margins is a long-term bet for investors, and perceived as a sustainable business model from a stability point of view, and a ‘good for the planet, people and world’ perspective, too.
One fintech changing the way people invest is workplace pension and savings provider, Cushon. You can read more about Cushon’s mission to connect people with their investments here.
Sustainability has become the core element for many business propositions, not just fintech, in recent months.
As conversations focused on how tech companies can build with niche markets in mind, and the shift in attitudes around servicing different communities changed, 2024 should be a bumper year for investors who are interested in ‘tech for good’.
Over the coming months, we expect to see growth in and focus on sustainability across multiple industries – whether health-tech, edtech, or fintechs.
New, clearer regulation around ESG in 2024 will also ensure businesses are practising what they preach, the continued conversation around how sustainability can be incorporated to achieve business goals will become more elevated and investor confidence in this area will increase the belief that these are the type of business models that deserve the spotlight.
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