Editor’s Note: At the World Economic Forum, MasterCard CEO Ajay Banga led a public session on Inclusive Growth in the Digital Age. We’re hosting an Inclusive Growth series on our blog, inviting others to share perspectives.
Like the best technologies, financial inclusion is not an end in itself.
Each year in February, as U.S. families prepare to file their federal income taxes, community centers open their doors to provide free tax preparation services for households earning less than $53,000 in income. As filers prepare to receive refund checks, many centers offer supplemental services: financial coaching and credit counseling, the opening of prepaid debit cards or savings accounts.
The most innovative program I’ve seen screens filers for signs of financial abuse. Skilled counselors offer guidance to women (typically) who may be trapped in abusive partnerships because they lack the funds to escape safely. Coaches explain how the lump-sum refund check can be a sum saved toward securing financial independence then safety. Big deal, high stakes stuff.
We see similar patterns in the use of microcredit or savings group meetings. Group members gain more than financial returns, often reporting to value supplemental services (health supplies, literacy training, advocacy opportunities) more highly than the small sums collected each week.
I pose these cases as a challenge to myself and my community of fintech fanboys and fangirls. Each success depends upon trust, developed face-to-face: counseling on folding chairs, spelling together at a neighbor’s home. If we are to enhance the power or scale of such programs using technology, we must find ways to engender human trust through screens and think beyond parameters of digital transactions.
I invite you to imagine innovations that might buttress successful person-centered services.
- How might encryption and anonymous data allow a person to report financial abuse more safely and begin to save in an independent account?
- Could a collaborative workspace offer the physical environment for the right mix of entrepreneurs to meet and create such a technology?
- Could savings groups shop in a competitive marketplace for goods or learn together in Khan Academy-esque modules? Could smarter infrastructures ensure safe delivery of goods and reliable broadband?
I keep the financial abuse case as my touchstone, a reminder of the profound power of financial access and the necessity to use technologies to propel us beyond the step of financial stability, toward an ultimate goal of prosperity and well-being.