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Eight startups driving global financial inclusion

🎵What’s Tech got to do with it?🎵 is the quarterly segment where our resident tech advisor over at Founders Intelligence, Alex Comninos, highlights the new technologies and startups that are impacting a particular cause area.

Financial Inclusion is the first step

Recent reports estimate 2bn (including 6.5% of the US population) adults continue to live without a bank account. Even more are regularly denied access to prohibitively exclusive ancillary services such as loan credit. It is clear then, that many people across the world are being systematically kept in poverty and financial instability through lack of access to the basic financial services crucial to economic advancement.

The future of fin-tech

2016 saw a total of 8.5 billion invested in fintech start-ups, mostly by Tier 1 banking institution. While this fintech boom - fuelled by disruptive tech innovations such as Blockchain - continues to overwhelmingly benefit a select minority, many have been attracted to the social and financial opportunity presented by the forgotten fintech sub-sector.

So, let us take a moment to showcase some of the leading start-ups that are using tech innovation to champion economic empowerment and inclusivity:

Abra

is using bitcoin technology in combination with local, physical ‘tellers’ in order to enable mobile cash transfers: having recently launched in the Philippines, the startup provides flexibility and security in what is largely a cash economy, and could result in large parts of the population bypassing traditional banking altogether. Providing mobile transfers as an alternative to cash economy has previously shown unexpected positive social effects, including decreased corruption and increased financial stability and mobility amongst low income households, as seen with the likes of Vodafone’s M-pesa in West-Africa.

Branch

founder Matt Flannery looked at the incredibly accurate understanding telecoms have of consumer profiles, and decided to use it for good. Aiming to use the technology to “dramatically reduce the cost of delivering financial services in emerging markets", Branch uses mobile data to provide credit for those without a credit history, potentially reducing risk and cost of taking up loans for anyone without access to traditional financial services.

Humaniq

uses biometric ID technology (facial and voice recognition) to replace lengthy documentation and verification processes around identification in banking, making the experience more inclusive for those without full documentation, and people with low literacy. The aim is to increase access to core banking services, remittance payments, and p2p lending in the short term, and third party services such as insurance, data security, small business loans, and pensions in the long term. Their Alpha launched earlier this month.

Taqanu

in a direct response to the refugee crisis, is on a mission to make banking services accessible to anyone, regardless of challenges around standard documentation, fixed addresses, and residency. Using blockchain technology, they’re able to identify people based on their mobile phone, to a high degree of accuracy, and use this digital identity to onboard them onto their banking solution. The impact on refugees' abilities to maintain a level of financial control and autonomy could potentially be enormous.

Amply

one of the 5 first companies to receive seed investment from UNICEF's new innovation fund combines mobile and blockchain technology to give children a digital identity, enabling accountability for providing access to services they are entitled to by the government, whether social, educational or financial. They are currently live in South Africa, where real-time personal profile data is used to guarantee subsidised pre-school education for those entitled.

Wisebanyan

touts itself as the “Worlds First Free Financial Advisor”, with a mission to ensure everyone can reach their financial goals, regardless of their starting financial situation. As the service requires users to have a minimum of only $1 in their account, accompanied by 0% annual management fees, it could democratise a traditionally ultra-exclusive financial tool.

Socure

uses complex data science to deliver identity verification for unbanked, underbanked and thin-file customers. This makes the solution ideal for younger populations as well as those in developing regions. The approach of combining massive online searches on behaviour information with sophisticated machine learning, has proven to increase consumer online trust by over 35%, reduce manual review by 90%, and increase fraud capture by up to 50%.

Aire.io

was in October 2016 authorised by the FCA as a new entrant alongside the “big three” bureaus in the credit scoring sector. The app algorithmically generates a score factoring in the character and capacity of applicants by leveraging machine learning to emulate the power of human intelligence. This helps to supplement the thin credit history of applicants such as young adults, the self-employed or those who have recently moved country.

Originally published on 24 March 2017

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Thea

International Programme Director
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