Thanks to the use of technology, fintech companies have been able to develop various financial tools for traditional banks and other emerging entities, which has allowed for greater inclusion in the financial sector. Among these financial tools, online banking stands out, having the potential to democratize access to money. Below, we’ll learn how fintech companies have contributed to financial inclusion globally.
Online banking and the democratization of money
Online banking is one of the financial tools that has most influenced the democratization of access to money, as it has allowed a large number of people (who did not have access to traditional banking services) to access better financial services and manage their economic resources effectively and efficiently, allowing them to participate and contribute to the global economy.
Online banking uses cloud-based technology and platforms to eliminate the various barriers that prevent people from accessing efficient financial services. Some of these barriers include geographic location, business hours, lack of physical offices in the city, high operating costs, and demanding requirements, among others.
How Fintech Enables Financial Inclusion
Fintech companies promote financial inclusion in a variety of ways. Below are some examples:
Innovative products
Fintech companies develop a wide range of innovative financial products and services designed to meet the needs of people who are unlikely to have access to traditional financial products or services.
For example, fintech companies design and provide intuitive and secure platforms that allow users to store and manage their money. One example of this is digital wallets, which are ideal for people living in regions with limited banking infrastructure.
Cross-border services
Fintech companies have the ability to offer cross-border services that can meet the needs of users who rely on international financial transactions, giving them the opportunity to participate in the global marketplace.
For example, Fintechs offer the possibility of carrying out cross-border transactions easily and effectively through multi-currency accounts or payment processors, thus benefiting small and medium-sized businesses, independent workers, and teleworkers, since they can offer their products and services (and charge for them) outside their borders.
Greater accessibility
Fintech companies ensure that financial services reach more people, primarily by providing financial tools that operate within online platforms and mobile applications, which can be used by anyone with a smartphone and an internet connection.
For example, Fintechs have taken advantage of the rise of telecommunications and smartphones to develop mobile applications through which customers can access their financial products/services from anywhere and at any time (24/7).
Economical and affordable services
generally offer more affordable and economical financial services, especially compared to traditional banking services. This ensures that financial services are more accessible to everyone and not an elitist or luxury product/service.
For example, Fintech companies offer the opportunity to open accounts without having to maintain a minimum balance and offer personalized services that adapt to the needs of each client, which allows them to eliminate or minimize costs for fees and commissions related to different types of financial operations (transfers, maintenance, currency exchange, among others).
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