Philanthropic Thinking

8 startups driving global financial inclusion

April 2017
Alex Comninos
Alex Comninos
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Our tech advisor over at Founders Intelligence, Alex Comninos, highlights the new startups that are turning the social potential of tech into reality.

Financial Inclusion is the first step

Recent reports estimate that 2bn adults today live without a bank account (including 6.5% of the US population). Even more are regularly denied access to prohibitively exclusive ancillary services such as loan credit. Many people across the world are being systematically denied the financial services that are so crucial to graduate from poverty and financial instability.

The future of 'fintech for good' is still unclear

2016 saw a total of 8.5 billion invested in fintech start-ups, mostly by Tier 1 banking institution. This fintech boom, fuelled by fundamental tech innovations like Blockchain, continues to overwhelmingly benefit a select minority, making it hard to predict how much of a transformative social effect it will have on the world’s poor. However, some innovators have been attracted to the social and financial opportunity presented by the forgotten fintech sub-sector. So let’s look at some of the start-ups that are using tech innovation to champion economic empowerment and inclusivity.

Combining high-tech and low-tech

Abra is using bitcoin technology combined with local, physical ‘tellers’ to enable mobile cash transfers: having recently launched in the Philippines, the startup promises 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 for low income households, as demonstrated by Vodafone’s M-pesa in West-Africa.

Appropriating existing tools

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, hoping to reduce the risk and cost of taking up loans for anyone without access to traditional financial services.

Shaking up old systems

Humaniquses 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, or with low literacy. In the short term, the aim is to increase access to core banking services, remittance payments, and p2p lending. Long term, this may extend to third party services such as insurance, data security, small business loans. Their Alpha launched earlier this month.

Making identification work for the displaced

Taqanu started as a direct response to the refugee crisis. It’s 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. This digital identity is used to onboard them onto their banking solution. The impact on refugees' abilities to maintain a level of financial control and autonomy could be enormous.

Increasing accountability and visibility in children’s services

Amply combines mobile and blockchain technology to give children a digital identity. The hope is to ensure the government is held accountable for providing children with the services they are entitled to, 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. Amply is one of the 5 first companies to receive seed investment from UNICEF's new innovation fund.

Democratising financial tools

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 help to democratise a traditionally ultra-exclusive financial tool.

Innovating on trust

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. Their approach, which combines 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%.

Credit scoring made flexible 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 could help to supplement the thin credit history of applicants such as young adults, the self-employed or those who have recently moved country.

Alex Comninos

Alex Comninos

Alex supports Founders Pledge on tech for good and is an Associate at Founders Intelligence, a specialist consultancy that helps the world’s leading corporates and investors to harness industry defining technologies and business models. Alex advises corporates and investors on digital strategy and technology innovation, and in this role has worked with Visa, News Corp, and Fannie Mae. Before joining Founders Intelligence, Alex worked in M&A, focusing on investments in media, internet and consumer business. Alex has varied volunteering experience, including coaching football at a local school in Costa Rica, and supporting Founders For Good & NSPCC Digital Taskforce.