Financial inclusion has become a crucial objective in the increasingly digital world to guarantee that everyone, irrespective of socioeconomic background, has access to basic financial services.
Large portions of the world's population have frequently been shut out of traditional financial institutions because of obstacles like geographical limitations, creditworthiness, exorbitant fees, and a lack of official identification. Fintech has become a potent tool for closing this divide and advancing financial inclusion, especially in Scotland where over 200 companies with both breadth and depth of technological capabilities are leading the way in financial innovation and developing unique financial solutions.
But what is financial inclusion – a lot of organisations who champion the phrase, especially in Scotland, seem to have a very blinkered view. As a first-generation migrant myself I have witnessed the financial exclusion of thousands of people of colour, locking them out of the financial systems that should support them. This exclusion perpetuates cycles of poverty, limits economic growth, and destabilises communities.
I like to define it as providing access to affordable, convenient, and appropriate financial services to all individuals and businesses, regardless of their differences. It is the guarantee that every person has access to affordable and essential financial services—bank accounts, loans, insurance, and investment opportunities. It means breaking down the barriers that prevent POC and other marginalised groups from participating fully in the economy.
Labour must prioritise financial inclusion
The new Labour Government must finally prioritise financial inclusion for POC as significant injustices and disparities in financial wellness persist. It is time for radical measures that tangibly involve this community and put FinTech at the heart of the solution. We have suffered ridicule, oppression, and systematic denial of financial opportunities for too long in an untenable, degrading structure designed to enslave and maintain an oppressive class structure that leaves POC at the bottom of society, like colonial Britain.
It does seem odd that many of the organisations in Scotland charged with solving the problem of financial inclusion are simply ignoring this segment of society – and yet it is these people who single-handedly can make a difference in the economic growth of this Country.
The continued financial exclusion of POC is not just a social injustice; it's an economic disaster. Billions are lost annually due to the underutilisation of the entrepreneurial potential within these communities. Racial inequality, including discrimination in employment and pay disparities, costs the UK economy approximately £24 billion a year in lost GDP. By not harnessing this potential, the UK forfeits billions annually, which could otherwise invigorate local economies, increase tax revenues, and reduce welfare dependency. Research from the Federation of Small Businesses indicates that businesses owned by individuals from ethnic minority backgrounds contribute at least £25 billion to the UK economy annually. Yet, these businesses often face higher rates of loan rejections from mainstream banks compared to their white counterparts. This systemic financial exclusion limits their potential expansion and contribution
Electioneering ignored financial inclusion
I can’t say I have been surprised that financial inclusion was not addressed in the recent electioneering, nor am I surprised that it continues to be excluded from the traditional media agenda. It is left to the FinTech media to continue the debate – at least they recognise the importance of the issue and are trying to do something about it.
Politicians think that financial inclusion is already being adequately addressed through existing policies and programs, or that it is an issue being handled by financial institutions and regulatory bodies rather than needing direct political intervention – unfortunately, this is not the reality for POC Do not underestimate the influence of banks and other financial institutions, as they wield considerable power over political agendas. Their interests may not always align with aggressive efforts for financial inclusion, especially if such initiatives involve regulatory changes that could impact their business models.
FinTech is the answer
In my view, FinTech must continue to lead the way if we are to have a more equitable society where everyone is financially included. FinTech has already taken center stage in the financial inclusion industry. Many believe that low-cost, far-reaching digital solutions hold the key to reaching out to the 1.7 billion people worldwide who are still excluded from formal financial services. Embracing fintech solutions enables businesses and consumers alike to access a wide range of financial services, enhance financial literacy, and improve overall financial well-being.
Just look at M-PESA, Africa's most successful mobile money service and the region’s largest fintech platform. Today M-PESA is the preferred way to make payments across the continent both for the banked and unbanked due to its safety and unmatched convenience. It also provides financial services to millions of people who have mobile phones, but do not have bank accounts, or only have limited access to banking services. Now, M-PESA provides more than 51 million customers across seven countries in Africa with a safe, secure and affordable way to send and receive money, top-up airtime, make bill payments, receive salaries, get short-term loans and much more.
FinTech has changed the financial services business, as we have seen in recent years. Innovative solutions from fintech companies have revolutionised traditional banking and finance by improving accessibility, streamlining procedures, and democratising financial services for both individuals and enterprises. I imagine a world where financial institutions and organisations will be providing more ethical and diverse products and services. I want to see financial marketplaces where consumer choices are made on ethical grounds and providers are displaying products based on more than commercial decisions.
One of the most significant impacts of Fintech is its ability to empower customers by providing them with greater financial autonomy. Several outstanding examples of Scottish FinTech firms are shifting the landscape in this regard. Of course, I must include my own company, MoneyMatiX, as a notable example, offering essential financial education to POC to create a more equitable playing field. Others who standout to me include Scottish FinTech Giggid.id, an impressive platform that enables companies to recruit from a global talent pool and upskill their workforce; and Edinburgh’s Float, the award-winning cash flow forecasting tool for small businesses.
Fintech solutions encompass a range of services, including investment platforms, mobile payment & banking apps, digital payments, online lending platforms, blockchain, cryptocurrencies, agent banking, and biometric identification. These technologies offer convenience, transparency, and flexibility, enabling individuals to manage their finances more effectively and make informed financial decisions. Additionally, by leveraging digital technologies to tap into new markets, fintech has significantly enhanced access to financial services for underserved populations, including the unbanked and underbanked.
As technology advances and consumer expectations evolve, the fintech industry, especially in Scotland, will remain at the forefront of innovation, shaping the future of finance and transforming the way we interact with money. Later this year, I hope to launch my new ‘Grow Your Money Hub’ which will be an ethical marketplace that will directly and proactively tackle inclusion.
The adoption of fintech for financial inclusion offers numerous benefits to individuals and migrant communities including Access to Basic Financial Services, Financial Empowerment, Facilitating Micro-Entrepreneurship, Enhanced Efficiency and Lower Costs and Data-Driven Personalisation
There is no doubt that Scotland is one of Europe’s leading financial centers, and the largest in the UK outside of London. I urge the new Government to collaborate more closely with FinTech companies here to map out a new solution to the challenge of financial inclusion.
There are many challenges ahead if we are going to arrive at a financially inclusive world – digital literacy, regulations, data security, digital divide, and infrastructure limitations are all barriers – but together FinTech can find a way to crack this.
Calling on my FinTech colleagues
I am calling on my FinTech colleagues to join me in trying to solve financial inclusion for people of colour. Let's all lobby the new Government for more funds to be invested in Scotland's FinTech to make this a more level playing field. Let's build a better financial future, one step at a time.
Because inclusive financial education isn't just an aspiration; it's a necessity.
I believe financial inclusion is a fundamental human right that must be a major election issue in dealing with Britain's economic challenges. Implementing focused policies, infrastructure investment, and financial literacy promotion is not a luxury but a must.
The financial exclusion of People of Colour is a stain on our society and a massive economic blunder. The time for empty promises and superficial changes is over. We demand genuine, impactful actions to dismantle the financial apartheid and pave the way for a truly inclusive economy.
Together, we can dismantle the hidden financial apartheid and build a fairer, stronger UK.
Overall, fintech's potential to democratise financial services is unparalleled, providing a robust framework to uplift economically marginalised communities, drive economic growth, and contribute to the overall goal of universal financial inclusion.
In the absence of any of the political parties talking about financial inclusion, I have prepared my manifesto to encourage a conversation about this critical issue. You can download it HERE.
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