Towards Finclusion: the inclusive - and exclusive - potential of FinTech

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A colleague and I were recently chatting on slack and decided to use, and make a comparison of, two apparently quite similar money management apps - Yolt and Bud. So far, so fascinating - white, middle class men talking about money and tech, yah.

Yolt and Bud are two relatively recent additions to the increasingly crowded FinTech marketplace, jostling for the attention of consumers.

FinTech is all very exciting. Last year, half of UK Fin Tech’s surveyed expected revenue growth to more than double in the next year, although there remained “question marks around customer adoption.”  

While this is an obvious business concern and while FinTech might be great for the already privileged, it’s unclear what it means for those who are, to a greater or lesser extent, ‘financially vulnerable’.

There is no shortage of good intention and inclusive rhetoric around FinTech.

Monzo CEO Tom Blomfeld has stated he would like to find ways to help...2-3 million people...into financial inclusion, with Monzo promising a ‘manifesto’ which includes details of how they plan to reach excluded individuals and groups.  

There are also a large number of diverse FinTech’s that have been recognised as having inclusive potential, such as Pockit, whose stated aim is to become the world’s most inclusive bank, Mespo, a “robo money saver”, and Sourcecards, a payment platform which also provides solutions for problems such as rent arrears posed by Universal Credit.

However, good intention is not always enough, especially if, as Toynbee Hall have pointed out, it’s not clear whether FinTech’s address “perceived” or “real” needs, particularly of the financially vulnerable.

A risk here is that FinTech’s may create, or exacerbate, a financial inverse care law where FinTech is more accessible to, more heavily used by, and more effective for already socioeconomically advantaged groups.

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The potential for this kind of intervention-generated inequality may be greater when, as in digital health, it’s unclear that interventions are developed with sufficient attention to content and usability, where evidence of efficacy is very limited, and where it can be very difficult to navigate an increasingly crowded marketplace.

There are legitimate grounds for believing in the inclusive potential of FinTech, but this optimism should be tempered with caution, not least because we’re probably relatively early in the hype cycle and there’s alot of work to do.

So, how do we mitigate the exclusive risk of FinTech and remain cautiously optimistic?

First, it would help to adopt an inclusive mindset that doesn’t try and develop solutions for the mythical ‘average’, and welcomes diversity. This implies researching and designing with and for individuals and groups at the greatest risk of exclusion, such as older people, those with mental health problems and the disabled.  

Second, it means building on the idea that FinTech is not a panacea. FinTech may provide a necessary part of an ecosystem - existing alongside and in combination with non-digital channels -  that supports financial capability and inclusion but it’s unlikely to be sufficient on its own.


Mindset reminders:

  • Fintech has great inclusive potential but also comes with the risk of intervention generated inequality
  • The FinTech marketable is relative immature with much uncertainty around effective design and efficacy of solutions
  • Mitigating the exclusive potential of FinTech requires an inclusive research and design mindset 

Chris Perry