With the right digital partner, banks can boost financial inclusion using financial literacy tools, innovative credit scoring and biometrics
Even today, millions of UK citizens cannot access mainstream financial services. Meanwhile, financial institutions are missing out on a corresponding number of opportunities to rebuild trust and confidence in the market, refresh and grow their customer base, create prolific new markets, and develop sustainable demand for a new generation of products and services. Digital technologies are playing a fundamental role in addressing financial inclusion. They improve the accessibility, affordability and attractiveness of financial products and services. For traditional financial organisations collaboration is key. They should look to partner with new entrants and fintech companies to unlock the opportunities offered by digital.
Major areas for bank/fintech collaboration are mobile, data, blockchain and artificial intelligence.
Here are some examples of fintech solutions banks could adopt to boost financial inclusion.
Online financial literacy tools
Cost-effective, efficient and easy to use tools that manage money.
EXAMPLE: Meniga’s personal financial management tools, allow users to see detailed breakdown of their spending across a range of categories, set spending targets per category, and compare their cash flow to similar customer groups.
‘Thin-file’ credit scoring
Credit decisioning for the unbanked or those with ‘thin’ credit files, through the use of innovative data, such as mobile phone payment history and social media.
EXAMPLE: AdviceRobo’s artificial intelligence platform combines data from structured and social sources with behavioural analytics, reporting and gamification elements.
Alternative methods of user identification and authentication, such as finger printing, retina imprints and selfies, bypassing the need for multiple passwords and traditional forms of ID.
EXAMPLE: BehavioSec, a behavioural biometrics provider, uses machine learning to authenticate users based on how they naturally interact with their device, i.e. the way they type or touch their phone screen.
Through successful collaboration banks will be able to deliver differentiated and engaging customer-led experiences, at speed and at scale.
By Olivia Belletty, Senior Consultant at Capco Digital