There are some massive changes happening in our world. And even though I like to think of myself as an optimist, they’re not all good. It can feel a little overwhelming at times: you want to help in some way, but it can be hard to figure out how. Well, there are lots of people who feel the same as you and me. And they’ve found ways to make a difference through FinTech.
It makes sense really. Many of the world’s problems are direct effects of poverty, or poor financial management. It can be hard for someone to get a foot in the door when they don’t have enough capital; people working hard to send money to family overseas pay exorbitant amounts for this to happen; and finding funding for worthy causes seems to be at an all time low. The list goes on. So what’s FinTech got to do with it? If you’ve got a social conscience (come on, we all do right?) then tune in.
Crowdsourcing is the sauce
A way of raising money through family, friends and other investors, crowdfunding is all about the collective and is primarily promoted through social media platforms. It’s not all about the money (money, money) though. Contributions don’t have to be fiscal - campaigns can ask for time, support, expertise and advice. Crowdfunding is awesome because it opens a more direct connection between the funder and the funded, fostering real relationships and possible ongoing investment. Plus, it means a bunch of different people are deciding where money is spent, instead of a few who sit at the top.
Lendwithcare is a perfect example of crowdsourcing’s potential for positive social change. Pledgers can choose from an array of deserving people and projects around the world to microfinance, with the knowledge that their money is going to someone who deserves it. You also have the opportunity to forge deeper connections with the people that you’re donating to. Connecting people globally, crowdsourcing is one of FinTech’s most obvious successes.
You’ve already been introduced to Liberac the rad duo from New Zealand who are trying to change the face of international money transfers. The costs of transferring money internationally can be extraordinary, with traditional transfer companies charging an arm and a leg for an overseas transfer. The people most affected by this are often migrant families who have immigrated just to work and provide for their family overseas.
Internationally, TransferWise are directly challenging giants like Western Union. Instead of charging 5-8% in transfer fees abroad, TransferWise charge just 0.5% of the amount converted. Any company whose aim is to reduce costs for the everyday person gets a tick in our books.
Investing with a little
A great development in FinTech has been that of investment startups, that circumvent traditional investing criteria, and best of all - fees. Let’s face it. Your typical ‘investors’ aren’t a working class couple with massive mortgage , or no mortgage at all but excruciatingly high rent. But with the rise of companies like Sharesies, investment becomes accessible and easy. You can do everything online, choose your level of risk and you can put away small amounts of money at a time. Already a hit abroad with Robinhood and the like, we’re hoping it’s not too long to see a future where investing is for everyone.
Banking for the people
Banking can be a chore. But to millions over the world, banking is a luxury that many don’t have access to. A lot of these same people have no valid identification, or adequate documentation that verifies their identity. Banking is simply out of reach. Canadian based firm BioConnect’s technology uses biometric identifiers, such as facial expressions and iris patterns as identification. This could be the key to banking in developing countries, where Vice President of strategic marketing and global alliances Bianca Lopes says “technology allows these [banking] systems to see these people, so they can become part of the economy.”
Paper identification may be difficult to come by, cellphones aren’t. Mobile banking could open up massive opportunities for those without. The social benefits of mobile banking exceed accessibility and connectivity. Platforms that provide you with updates and robo-advice could result in an overall increase in financial fitness and literacy, leading to a reduction in debt, and bankruptcy.
Wanna do more?
These are only a handful of ways FinTech can be used for social good. Hundreds of new startups and crowdfunded campaigns are sprouting every year, that all have the promise of changing the way we think about finance, and the way everyday people and those under the poverty line, might have a better chance at being part of it.
Check out the Social Tech Guide, by Nominet, who each year provide us with a comprehensive list of technology companies that are doing their part of society, and find out how you can get involved.
Kristen Lunman is the Programme Director of Kiwibank FinTech Accelerator. Follow her on Twitter. To find out more about the KFA programme, get in touch.