The Key Role of Fintechs in Financial Inclusion

Spread the love

Fintech companies play a significant role in financial inclusion by providing financial services to individuals and businesses that may not have access to traditional financial institutions. This can include people who are unbanked or underbanked, as well as small businesses and entrepreneurs in emerging markets.

Under the aegis of top fintech leaders, fintech companies have left an indelible mark on the state of financial security across the world. Their use of smart, digital technology has bridged the gap between financial services and millions of customers. This has meant that women, low-income households, and SMEs have a greater opportunity to contribute to the economy and their own prosperity through financial independence. In fact, a recent WEF study has shown that the before-mentioned customers account for more than 50% of the existing global fintech customer base. 

Thus, today’s fintech industry leaders are more than just tech innovators in finance. They are critical enablers of greater equality, economic well-being, and social progress. All of this ties into the financial inclusivity narrative being strengthened by the rise of fintech. 

How Top Fintech Leaders Are Enabling Financial Inclusion

Fintech industry leaders have prioritised using technology, such as mobile apps and online platforms, to deliver financial services in a more convenient and accessible way. For example, fintech companies can offer digital payment systems, peer-to-peer lending platforms, and crowdfunding platforms that can be accessed through a smartphone or computer.

By providing access to these types of financial services, fintech companies can help to bridge the gap between those who have access to financial services and those who do not. This can help empower individuals and businesses by giving them the tools they need to manage their finances, save money, and invest in their future.

When we take a closer look, the fintech industry has played a significant role in the growth of India’s economy in recent years. According to a report by the Reserve Bank of India (RBI), the fintech industry in India has grown significantly in the past decade, with the number of fintech firms in the country increasing from around 200 in 2010 to more than 7,000 in 2022.

In that regard, many fintech industry leaders have contributed to the growth of financial inclusivity in several ways, including:

  • Improving accessibility of digital finance to underserved populations: Traditional banking services rendered establishing brick-and-mortar banks and financial facilities like ATMs in remote and rural locations of India an almost impossible task. However, the likes of Sanjiv Bajaj – the Chairman and Managing Director of Bajaj Finserv and President of CII (2022-23) – have paved the way for fintech companies and NBFCs to improve financial accessibility to underserved populations radically. A notable financial visionary leader, Sanjiv Bajaj has favoured cutting-edge technology, such as mobile banking and digital payment platforms, to make its products and services more accessible to a wider range of customers. From data analytics-based loan approvals within seconds to EMI and low-cost credit cards for the masses, Sanjiv Bajaj has revolutionised consumer and MSME finance via Bajaj Finserv’s digital offerings.  
  • Improving efficiency: Fintech firms like PayTM have introduced new technologies and processes that have made financial transactions faster and more efficient, which has helped boost productivity and reduce costs. Vijay Shekhar Sharma, the Founder of PayTM, is often noted as the visionary leader who popularised instant mobile payments in India. He thus enabled everyone from rural vendors to citizens in Tier-2 and Tier-3 towns to make their payments more secure, hassle-free and instantaneous – without the need to withdraw or carry cash.
  • Improving financial literacy and awareness: An important aspect of financial inclusivity is awareness of various products, services, and technologies among customers. With increasing smartphone and internet penetration in India, more and more people are exposed to the latest fintech solutions and services. This is where the likes of Bajaj Finserv, led by Sanjiv Bajaj, have helped to increase awareness of the importance of financial planning and management among underserved communities. They have partnered with various government and non-governmental organisations to promote financial literacy and education, thus providing the masses with an insight into how they can avoid financial scams and become financially secure.
  • Boosting economic growth: The fintech industry leaders have also contributed to economic growth in India by creating new jobs and driving innovation in the financial sector. With over 7000+ fintechs booming in India, the ITes sector has seen massive employment growth. This has also led to a new wave of upskilling in 21st-century skills like data science, AI/ML, etc. 
  • Increasing competitiveness: The fintech industry has helped increase competitiveness in India’s financial sector by providing new and innovative products and services that have disrupted traditional financial institutions. Prime examples include the rise of Razorpay by Founder Harshil Mathur – a disruptive online payments gateway solution for B2B and B2C – or the rewards-based credit card payments platform CRED by Founder Kunal Shah. These innovative fintech platforms, which are a direct result of increased fintech competition, enable businesses and consumers to manage their finances with greater freedom and convenience.

Final Thoughts

Driven by ethics of value-based leadership, today’s fintech leaders and firms continue to add immense value to businesses and customers of all scales and tiers by creating a new financial support system. The idea is to bring the masses into the formal global economy by empowering them to become financially self-sufficient, efficient, and secure. 

Fintech has truly created a radical shift in how the world engages with financial services, thanks to the latest leaps of technology such as Web 3.0, artificial intelligence, machine learning, data analytics, cryptocurrency, neo-banking, blockchain, and more. The vision behind the top fintech leaders is simple: to leave no one behind as the world moves toward universal digital transformation. This translates into the development of personalised, data-driven financial services that enable businesses to pursue new opportunities, vulnerable individuals to get emergency financial relief, ambitious youth to pursue their dreams, and the world economy to prosper.

Asees Mehtab

Subscribe to our Newsletter

Subscribe to receive the weekly Newsletters from our website. Don’t worry, we won’t spam you.