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Humanising Fintech: Putting heart back into technology

Timothy Chan

Business Solutions Manager, Corporate Banking - OCBC Bank

Timothy has over eight years of experience offering strategic trade finance execution, operations and technology advisory. In his capacity as the head of transformation in the field of trade finance for a local bank, he has collaborated with fintech firms, governments and banks in delivering solutions involving blockchain, IoT, machine learning and other technology. Timothy graduated from the Master of IT in Business, Financial Technology Track in 2017.

Humanising Fintech: Putting heart back into technology

We need to focus on humanising financial technology, to decode the human psyche and deliver solutions that the world is in need of.

With the proliferation of fintech solutions in the market, most have been dedicated toward driving efficiency and automating decision-making for complex processes within organisations. Few efforts have been directed towards enabling people’s lives. Some solutions have been applied to enhance the customer experience, but there have been fewer attempts to use fintech to radically transform the lives of the unbanked.

There are currently 1.7 billion adults around the world who remain unbanked, 14.5% of whom are in ASEAN. That’s 246 million people. These are people who lack access to bank accounts, a secured means of transferring funds and many other basic services that are otherwise taken for granted.

Financial inclusivity for the unbanked and the rise of e-wallets

What does humanising financial technology aim to achieve? It should empower the unbanked with solutions that address the trinity of fundamental banking services: to be able to store money, to be able to transfer money and to be able to borrow or receive credit. Driving financial inclusion and bringing the unbanked into the fold are attainable, if fintech companies start to direct resources to strengthen their focus into these areas.

We could start by decoding the human psyche to decipher what could enhance their lives, before creating useful solutions for them. Fintech must directly connect with people and evolve with their needs.

How could we achieve this?

Financial institutions and fintech firms rely on automated AI for their operations and to make decisions on their suite of financial products and services. Often, the sample sources of the input data drive the core functions of these AI engines and create the basic assumptions used in data analysis. Hence, it is crucial to accumulate and use data in an inclusive manner. This means that factors governing the data used (e.g. demographics) should be considered in a holistic and future-forward manner. For example, if banks were to only use data from their affluent clients to conceptualise future products, they could alienate the population that is currently not in the same income bracket, thus missing this opportunity to acquire new potential customers. In this vein, organisations would need to be cognisant of the importance of being inclusive in their approach when collating data sets for ethical AI implementation.

Customer journey studies have been a key method used by banks and fintech companies to harness insights reflecting the customer’s voice. It is imperative that they start to flip over to the other side of the coin and study non-customers. Why are they not with us in the first place? This is best carried out on the ground. Are our banking solutions and products alienating the geographically inconvenienced? Are there ways to provide financing to people or businesses that have no credit records and history? These are just some of the questions that need to be addressed, and few have ventured down this road.

That being said, there are existing solutions in the market, such as e-wallets, that reach out to the unbanked.

For instance, people who live in rural areas or technologically less developed countries often find themselves in perpetual financial “dead zones”, and are unable to gain access to banking. With growing digitalisation and the planned reduction of brick and mortar bank branches around the world, a large proportion part of banking services can now be carried out on mobile and internet platforms. E-wallets are now a viable alternative through which they can access financial services. Users are able to store value, transfer cash directly to other users and make purchases. Topping up the e-wallet can be as simple as buying a top up card at a local convenience store.

With e-wallets, people can gain access to online platforms for lending and borrowing, and plug this gap in their lives. To address challenges in the lack of credit reporting information available for the unbanked, new solutions need to be created such that credit assessment can be carried out with information drawn from other facets of a person’s life, such as social scoring, employment stability and even their vocational skills.

Fintech companies can do more for the millions who are unbanked. Quoting Modi, Prime Minister of India, who spoke at the recent Singapore Fintech Festival, “(We need) to make opportunities and prosperity a reality in a lifetime, for billions, to make the world more humane and equal – between rich and poor, between city and villages, between hope and achievements… in pursuit of a better future for humanity.” It is an exciting time for the banking industry, with the advent of fintech – promising, enabling and empowering all at once.

Last updated on 09 Sep 2020 .