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E-Payments: Is ‘FinTech for Good’ a fact or fantasy? Experts speak

*Digital payments experts assert the FinTech is an opportunity, a tool that can empower and provide social economic mobility, but it is up to leaders to create and deploy inclusive FinTech solutions that meet the needs of diverse consumers in the ecosystem

Gbenga Kayode  | ConsumerConnect

Experts have opined the electronic payments system concept, ‘FinTech for good’, gets thrown around a lot in recent times.

But does the phrase have any legs – or is it just a collective industry pipe dream?

Polly Jean Harrison, features editor at The FinTech Times, shares more views from across the industry following part one and part two.

In assessing the ‘goodness’ of FinTech in the global payments ecosystem, Nicole Valentine, FinTech Director at think tank Milken Institute, an independent economic think tank based in Santa Monica, submitted that we should rather ask ourselves if it is empowering or exploitative, reportedly said: “Is it equalising or destabilising? Fintech is only as good as what it can do.

“The promise of FinTech must match its implementation and application in the real world for people with real issues accessing and transacting capital.”

Valentine also noted: “There are real deficits and gaps in banking systems around the world.

“FinTech platforms and products have proven their ability to close economic divides and open up opportunities for homeownership and entrepreneurship.

“FinTech is good when it can serve as leverage and a bridge.”

The expert said: “What FinTech needs is more than just a promise of being good.

“FinTech is an opportunity, a tool, that can empower and provide social economic mobility.

“It’s up to leaders to create and deploy inclusive fintech solutions that meet the needs of diverse users.”

He as well opined “if FinTech wants a Big G, as in good, on its report card, it must turn the ideals of inclusion, access, and innovation into a reality for us all.”

Impact of FinTech in the non-profit sector

Kim Minor, Senior Vice-President, global marketing at Provenir, a data and credit decisioning software for the world’s FinTechs, explained that FinTech is driving significant innovation in the non-profit sector, making it easier to receive donations, empowering organisations to address urgent needs globally, and giving rise to innovative business models for nonprofits,

Minor said, “we are seeing tremendous innovation in the ‘fintech for good’ ” sector, and this is not just a lightweight ‘good washing’ – FinTech is helping to reinvent the business of giving – addressing significant economic shifts and making meaningful differences in local communities around the world.

It is said that necessity is the mother of all invention, stated the expert.

Minor also stated: “The nonprofit sector is being significantly challenged by global economic uncertainty, and the need for their services is greater than ever.

“At the same time, record high inflation is daunting for nonprofits, which are particularly vulnerable because they cannot react to rising prices the way for-profit businesses can.”

FinTech enables fund accessibility, empowers non-profit organisations

In regard to the benefits of the e-payments system, the Senior Vice-President, global marketing at Provenir, noted: “FinTech providers have introduced solutions that make it easier and less costly to receive donations which means these organisations can focus more on their mission and spend less time and effort fundraising.

“And it can also make funds more accessible, on a global basis quickly, which can empower non- profits to address urgent needs in the event of natural disasters or humanitarian crises.

“We are seeing completely new and innovative business models for non profits being born on the back of FinTech.”

Strategies driving authentic ‘FinTech for good’

Greg Ott, Chief Executive Officer (CEO) of FinTech Nav, the financial health platform for small businesses, emphasises the importance of going beyond vague intentions and empty promises in the FinTech industry.

“From the outside, a crowded tech category can look like a gold rush. “Every company seems to want a piece of a potentially profitable pie. “FinTech has certainly suffered from this perception, fuelled by the flurry of look alike companies competing for consumer’s attention (and wallets).

Pair that with the evolving role of purpose in marketing, and it becomes a bit of a reckoning, Minor stated.

Value-addition to consumers

It has been said that today’s consumers no longer accept empty promises of ‘doing good.’

The proof is in the impact of a company’s activity moere than a vague intention of ‘good’.

“What does that mean for the idea of ‘fintech for good’? It means finding historically underserved audiences – like small business owners – and putting them at the centre of every decision we make.

“We believe embedding the idea of ‘good’ in products, instead of bolting it on as a way to drive engagement or making a one time donation to a cause and marketing it as a commitment – is the only way to drive good that’s impactful instead of performative.

The Senior Vice-President, global marketing at Provenir, said: “At Nav, ‘fintech for good’ means a relentless commitment to building intelligent products that help small businesses thrive.

“We hear constantly from our newest customers that the financial landscape is impossibly complex and opaque for small businesses.

“Our role as an objective partner for business owners is to help them understand and navigate that landscape quickly, get the information and options that are most relevant to them, and get back to running their business.”

Minor noted: “To us, good means recognising that what’s good for small businesses is good for communities, individuals, families and entire economies.

“From where we build, when all this is embedded in your mission and products, the good happens naturally and authentically.”

FinTech for positive change

Philip Hart, Chief Internal Auditor and Executive co-sponsor for ESG at ClearBank, the first UK clearing bank in 250 years, also highlights that the concept of ‘FinTech for good’ is not just a marketing strategy, but a real force for positive change.

Hart, Chief Internal Auditor and Executive co-sponsor for ESG at ClearBank, stated: ” Gihhntech for good is not just a marketing exercise – it is a real force for positive change.

“For it to be effective you have to seek out the issues and situations where there’s an opportunity for fintech to help people.

“As an example of societal impact, there have always been people without bank accounts, and the shift to digital payments risks leaving them even further behind.”

Comparative analysis Hart recalled that “as of 2020, 1.2 million UK adults had no current or e-money account of any sort.

“There’s also a great deal of overlap between those who are unbanked and those in receipt of benefit payments.

“ClearBank has worked with PayPoint and the Department of Work and Pensions to create a system where benefit payments are delivered as secure digital vouchers, issued in real-time through a choice of SMS, a unique barcode displayed on a smartphone, PDF delivered by e-mail or a reusable mag stripe plastic card—whatever works best for the consumer.

“These can be used to withdraw funds at one of 28,000 PayPoint retailer outlets or 11,500 Post Office branches.

“The result is wider access and greater choice for people who can often find these choices narrowing as a result of change,” Hart stated.

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