Five ways to diversify fintech for future consumer

Fin­tech could help diver­si­fy finance, open­ing the field to his­tor­i­cal­ly under­served pop­u­la­tions. So how can firms boost acces­si­bil­i­ty – and what chal­lenges do they face? 

The sec­tor has already trans­formed the way we make, man­age and spend our mon­ey on a day-to-day basis. Accord­ing to indus­try pub­li­ca­tion Fin­Tech Futures, in June 2021 there were 24% more fin­tech start-ups than at the end of 2020, with the glob­al sec­tor expect­ed to be worth $324bn (about £240bn) by 2026.  

Tra­di­tion­al bank­ing still exists, of course. How­ev­er, fin­tech has helped the indus­try diver­si­fy its client base and progress towards a more inno­v­a­tive and inclu­sive finan­cial ecosys­tem.  

Diver­si­ty in fin­tech – from peo­ple to pro­gram­ming – is essen­tial to cre­ate prod­ucts, ser­vices and solu­tions that are acces­si­ble to all and meet the ever-evolv­ing demands of a dig­i­tal-first world. “The risk of the lack of diver­si­ty in fin­tech is that com­pa­nies will end up stuck inside their own echo cham­bers,” says Nabi­lah Hus­sain, head of Fin­Crime at glob­al online bank­ing ser­vice 3S Mon­ey. “Chal­leng­ing the ‘nor­mal’ way of think­ing not only enables firms to ques­tion cur­rent and future strate­gies with­in the work­place … it also pro­vides a per­fect cat­a­lyst for sec­tor inno­va­tion,” she adds. 

Here are five ways that fin­tech com­pa­nies are diver­si­fy­ing and adapt­ing their core busi­ness strate­gies to bet­ter serve future con­sumers.

1. Customer experience 

The bank­ing and finan­cial indus­try has long been accused of favour­ing the wealthy and white, while exclud­ing eth­nic minori­ties who stereo­typ­i­cal­ly face chal­lenges when it comes to man­ag­ing mon­ey. But in a mil­len­ni­al age, access to finan­cial ser­vices is vital for peo­ple from all back­grounds. That makes the next gen­er­a­tion one of the fastest-grow­ing client bases for fin­techs. 

“The key to improv­ing finan­cial inclu­sion is the offer of per­son­alised prod­ucts, ser­vices and adapt­able cus­tomer expe­ri­ence” says Sofia Nunes, co-founder and head of diver­si­ty, equi­ty and inclu­sion at cloud bank­ing plat­form Mam­bu. She points to Mam­bu research from 2020, which found that 37% of ‘banked’ and 35% of ‘unbanked’ con­sumers glob­al­ly rely more on online search for infor­ma­tion on the right prod­ucts than they do on their bank. How­ev­er, “both groups feel their finan­cial sit­u­a­tion would be improved if their bank pro­vid­ed bet­ter edu­ca­tion on how their finances worked,” she adds. 

“Enabled by tech­nol­o­gy, fin­tech play­ers and neo-banks are lead­ing the mar­ket with per­son­alised ser­vice mod­els and a cus­tomer-cen­tric approach by pro­vid­ing users with the tools and knowl­edge they need to man­age their finan­cial lives and pro­mot­ing a more inclu­sive finan­cial expe­ri­ence for all.”

2. Accessibility 

As much as fin­tech offers faster, quick­er and more effi­cient finan­cial ser­vices than tra­di­tion­al bank­ing, there are still gaps when it comes to mak­ing the sec­tor more inclu­sive, includ­ing acces­si­bil­i­ty. 

“Fin­tech, like many sec­tors, still has a way to go to improve the diver­si­ty of and equi­ty for tal­ent, but I think there is a huge oppor­tu­ni­ty to cre­ate more acces­si­ble tech­nol­o­gy to ensure that finance is acces­si­ble to those with dis­abil­i­ties and neu­ro­di­ver­gent indi­vid­u­als,” says Dr Joan­na Abeyie, founder of Blue Moon, an inclu­sive exec­u­tive search busi­ness and inclu­sion con­sul­tan­cy prac­tice. 

Since finan­cial tech­nol­o­gy is con­stant­ly chang­ing, updat­ing and evolv­ing into more advanced ver­sions, fin­tech com­pa­nies – both estab­lished and emerg­ing – must acknowl­edge that today’s eth­i­cal­ly con­scious con­sumers ​seek ser­vices that are suit­ed to them and those around them. Con­sumers dif­fer in iden­ti­ty, Abeyie notes. While you might have a cus­tomer pro­file and a tar­get audi­ence in mind, fail­ing to see them as more than one homoge­nous group will only lead to busi­ness, ser­vice and prod­uct fail­ings, she says. 

“Fin­tech firms must per­form web and mobile acces­si­bil­i­ty audits across all plat­forms and ensure use­abil­i­ty, test­ed by those with dis­abil­i­ties, not only to ensure that prod­ucts are cre­at­ed through a lens of acces­si­bil­i­ty and inclu­siv­i­ty, but so there is also proof of con­cept to ensure that mod­i­fi­ca­tions and alter­na­tive process­es are con­sid­ered,” Abeyie adds.

3. AI and algorithms 

Fin­techs are backed by arti­fi­cial intel­li­gence (AI) and algo­rithms, so it’s cru­cial to diver­si­fy the data used to ensure ser­vices are free of bias­es based on the racial or socio-eco­nom­ic back­grounds of con­sumers. 

There could be chal­lenges for fin­tech com­pa­nies that heav­i­ly rely on old data col­lect­ed to pre­dict the pat­terns and pur­chas­ing habits of future con­sumers. “One way fin­techs can tack­le bias­es present in pre-pro­grammed tech­nol­o­gy is by accept­ing and pro­mot­ing diver­si­ty with­in their data sci­ence teams. The field can rise beyond stereo­types pre­sent­ed in these algo­rithms,” says co-founder and chief oper­at­ing offi­cer of Camino Finan­cial, Ken­neth Salas. 

From the start, new fin­tech firms must think about ways to improve their data sets and design a mod­el to account for data gaps. In light of any short­com­ings, they must lim­it where or how they use the mod­el, he says.  

“Busi­ness and organ­i­sa­tion­al lead­ers must ensure that the AI sys­tems they use improve on human deci­sion-mak­ing, and they have a respon­si­bil­i­ty to encour­age progress on research and stan­dards that will reduce bias in AI.”

4. Services and solutions  

Fin­techs can be used for an array of finan­cial ser­vices, from per­son­al bank­ing to buy­ing dig­i­tal mon­ey or man­ag­ing invest­ments. Although con­sumers can eas­i­ly down­load numer­ous appli­ca­tions for func­tion­al pur­pos­es, there’s a huge oppor­tu­ni­ty for fin­tech firms to diver­si­fy their prod­ucts by offer­ing mul­ti­ple ser­vices in one place. 

“Giv­en the inter­con­nect­ed­ness of ser­vices and prod­ucts and new entrants to the mar­ket, a future cus­tomer of fin­tech is going to require a holis­tic prod­uct suite or one-stop plat­form to ser­vice their finan­cial needs,” says Salas. 

Over the next few years, finan­cial prod­ucts will become an embed­ded part of the pur­chase jour­ney, adds Nunes, rather than a stand­alone ser­vice. “We will see a shift towards ‘lifestyle bank­ing’ as ser­vices are becom­ing more embed­ded into cus­tomers’ lives through tech­nol­o­gy-enabled inte­gra­tions,” she says.

5. Customer communications  

Once a fin­tech com­pa­ny has estab­lished a prod­uct or ser­vice that’s ready to mar­ket to cur­rent or future con­sumers, it’s essen­tial to strate­gise on the best ways to com­mu­ni­cate and reach tar­get audi­ences, ensur­ing the mes­sage res­onates and ulti­mate­ly sells. From dig­i­tal adver­tis­ing to social media and influ­encer mar­ket­ing, there are var­i­ous ways that fin­techs can cre­ate a buzz around their brand.

The first step, how­ev­er, is to research cul­tur­al dif­fer­ences. Com­pa­nies can miss the mark if they attempt to cap­i­talise from the mass­es rather than tru­ly con­nect­ing with con­sumers.  

Lan­guage and tone of voice are often huge bar­ri­ers, Salas notes, so adding mul­ti­lin­gual con­tent opens fin­tech sys­tem access to wider audi­ences. 

“Hav­ing cul­tur­al­ly rel­e­vant con­tent will allow for deep­en­ing rela­tion­ships across a more diverse audi­ence,” he says. “For exam­ple, if we are tar­get­ing a more text savvy ver­sus email savvy audi­ence, we should look towards adjust­ing com­mu­ni­ca­tion mod­els to fit this trend.”