Fintech, or financial technology, arose due to a significant need in the finance industry. Consumers were looking for more ways to connect and interact with their financial institutions, especially following the 2008 financial crisis.
Surprising to some in the industry, fintech took off in an unexpected way, mainly because it was not necessarily initiated by those actors within the inner circle of the industry (like traditional banks), and much of the growth in this industry has come from startups. These startups have taken an active role in the ecosystem, leading to the emergence and development of financial technologies (including neobanks and ACH APIs), customers, and fintech regulation.
Now, as fintech is increasingly commonplace, essential financial products will soon become accessible and readily exchanged in free markets globally. Moreover, fintech will contribute to more access opportunities and financial inclusion. Read on to learn more about this sweeping new trend:
Financial Inaccessibility vs. Accessible Financial Services
There’s a social aspect of financial access and financial literacy that fintech companies can address. In particular, many social groups, for several reasons, struggle to gain access to financial technology and financial mechanisms.
These include basic checking accounts, savings accounts, investment accounts, and money transfer technologies. These restrictions range from a shortage of financial literacy to eligibility purposes or no access to government support. Unfortunately, this means that millions of people don’t have access to the financial resources needed to work, live, and compete in the modern world.
With so much of our current social structure centered on technology, financial experiences need to become more accessible, and fintech offers the greatest opportunity.
The Growing Need for Financial Accessibility
Accessibility refers to an individual's ability to access a product, object, service, area, etc. Access can vary based on individual needs and situational set-ups. Not all access is the same.
The most commonly talked about versions of accessibility right now center on mobility and technological accessibility. For instance, accessibility in terms of mobility means that physical locations (let’s say banks and financial institutions) have the means to support people of all physical capacities, mental capacities, or otherwise. An individual who is blind needs brail at the ATM; banks need to provide wheelchair accessibility as well. Websites also are increasingly accessible, providing website visitors with alt text, read text options, and more.
The same concept of accessibility can be applied to fintech. Based on how our society is set up and our moral priorities, financial startups and institutions are increasingly aware of financial accessibility pitfalls. They see ways that technology fills the gaps.
Like anything else, financial accessibility is multi-faceted. Among other things, financial accessibility needs to account for:
- Physical and mental needs
- Mobile experiences
- Financial ineligibility
- Cost restrictions
- Geographical limitations
- Large-scale sociological barriers
- Cost prohibitive technology
- Financial needs
- Consumer desires
With these things in mind, Sila and other fintech can build financial technologies that address these needs specifically.
Finding Fintech in Your Marketplaces: The Dynamics of a Fintech Commodity
Right now, most fintech firms emerge from a brilliant idea that solves a problem. These startups must learn how to start a fintech firm and connect with a company like Sila to get the ball rolling.
So what happens when fintech products or services are more available in marketplaces? In terms of financial accessibility, this might look like a merchant or company quickly purchasing fintech as an add-on for their services. Instead of relying on another service to integrate into their online payment processor, they can own the platform and securely interact with the necessary bodies that operate financial payment technology.
With more companies buying fintech, the industry can put more heads together to develop connections for sending money or sharing financial technology. It comes down to access to primary financial products. With a world so increasingly reliant on financial technology for money movement, it may be surprising how many people don’t have a bank account. This means they don’t have an account at a financial institution or mobile money provider.
Is the drive to get people using mobile financial apps helping users? Most would say that yes, users want that ease, but what happens when companies start to focus all of their energy on these mobile experiences and leave out traditional banking methods? The onus is currently on the financial institutions to make sure to account for traditional banking methods, but accessible fintech could fill this niche.
Ways That Fintech Is and Will Be Accessible
Fintech is already increasing accessibility since it allows more users access to banking products in general and provides more ease of use for mobile banking, integrated banking, embedding banking, and custom products.
Fintech is more accessible, but emerging startups and technologies could increase. Fintech innovation can:
- Make investment and investment education more accessible, approachable, and affordable
- Increase financial literacy in numerous social groups
- Remove sociological barriers, like financial restrictions, gender-based discrimination, and racial concerns for banking
- Increase access to large money lending like mortgages, loans, and lines of credit
- Improve the rate of small businesses gaining access to financial capital and resources
- Increase the interconnectivity of banking and financial resources to move money faster, improve bank access rates, and real time payments (examples include instant settlement and iACH in the U.S.)
- Encourage more financial interest in more social groups
- Provide banking resources in areas where economic infrastructure is poorly established or not established for international financial relationships
- Allow more individuals access to fintech products to grow more businesses and increase capital, assets, and wealth in different countries and social groups
The ability to make financial services accessible is exponential. The more accessible fintech innovation becomes, the more accessible financial services become, and the more both evolve.
How Sila Supports Accessible Fintech and Financial Services
Sila is a financial service that allows businesses and startups access fintech code, technology, and resources. This includes the important stuff like compliance and security, too. By providing these tools as-a-service, more people can enter the fintech industry–as you can start a business more affordably and faster through this model.
Sila wants to remove the barriers to making the fintech industry a more equal playing field, which includes providing support for compliance and bank relationships.
Interested in starting an ACH API or getting into international remittance? Sila is your go-to payment infrastructure as a service that provides reliable financial technology, connections to existing financial partners, and secure access to vital banking networks. See today how Sila can help you build your next fintech dream.
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