Going it alone isn’t the way to fast forward financial inclusion – banks need to look to collaborate. Community, knowledge, collaboration – these are three powerful drivers behind Fidor's passion for financial inclusion. We are determined to help banks break down the barriers that prevent easy onboarding of unbanked and underserved communities, in all types of economy, globally.
The World Bank, International Finance Corporation, the Bill & Melinda Gates Foundation, the United Nations, the Centre for Financial Inclusion – they are powerful players dedicated to opening up access to financial products to everyone. Why? Because financial inclusion is a key enabler of sustainable development and should be and is a priority of policymakers, development agencies and regulators globally. Initiatives in financial inclusion don’t just alleviate individual poverty. They have a broader and truly essential impact, creating more sustainable and inclusive markets and for individuals, access to a bank account or micro-finance has often proven to be the first step in bringing opportunities within the formal economy.
There are three main reasons for banks to work on broadening local access to banking products – CSR, regulation and commercial imperatives. Yes, whether we are talking about emerging or more established economies, there is profit and scale to be had from financial inclusion, providing it’s done right and, when banks meet those needs in their local markets, they help ensure that buying power stays within the region to create wealth. But there are barriers too. Some barriers are external – unfriendly regulatory regimes, costs and difficulties in leveraging traditional physical infrastructures, especially when the underserved communities are in remote and rural locations and competition from other players such as telcos, tech giants and fintech. Some come from the very people the banks are trying to serve – a lack of trust of banks, a lack of general literacy and, in particular, a lack of financial literacy that means that even when accounts are made available and are opened, they may not be used and others are internal – inflexible IT platform or the expectation that simply adding a new channel to a traditional product offering will be adequate. But it makes no sense to simply offer existing products to underserved populations.
For banks to meet these challenges in a way that makes their engagement worthwhile, they have to understand the specific requirements of these new types of customer, they have to ensure that customers can use what they create and they have to see the power of collaboration and Fidor can help. Fidor believes in the wisdom of the crowd and its key role in financial empowerment. Community is at the heart of what we do, whether it’s disrupting banking in established economies or providing the platform that is already powering inclusive initiatives in Algeria, Germany and UAE, just for starters. It is this digital community approach that can be so powerful in improving financial literacy – allowing bank users to increase knowledge and share experiences across all areas of personal finance with their peers, supporting each other as they move towards achieving their individual financial goals and it’s equally powerful in ensuring that the bank knows what its customers are thinking and what will meet their needs. This community feature is just one aspect of Fidor technology – a white-labelled open infrastructure which plugs straight into core banking systems and supports easy account opening and KYC processes, simple and secure access to account and transactions anytime via mobile and web devices, and real-time money sending to mobile numbers. It’s equipped with APIs that easily integrate third-party technologies and services into the bank’s offer, making sure that it can meet new needs as quickly and flexibly as possible.
By collaborating rather than competing with a fintech like Fidor and by engaging with third-party service providers, banks can respond quickly, flexibly and profitably to the needs of the underserved in their markets, without having to retool their platforms. Fidor’s business model is deeply rooted in providing fair banking in the most efficient fashion possible, which aligns with financial inclusion agendas. Having access to financial services can improve people’s everyday lives in emerging and more mature markets. We’re proud our vision can contribute to that.