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They say the holiday season brings people together – reuniting families and friends and providing an opportunity for joy, gifts and gorging on delicious food (or bickering with siblings, fighting for the best piece of turkey and being forced to wear ugly sweaters). Whatever you celebrate, the holidays are often seen as a good time to give back and consider the people who may be at a disadvantage in some way. To get into the spirit of the season, we’ve been looking at financial services organizations and fintechs that encourage environmental sustainability or aim to serve the underserved – empowering marginalized populations with access to credit, banking and other innovative fintech products.

Minorities and recent immigrants face unique challenges when it comes to accessing financial services products. But encouraging financial inclusion of all individuals “strengthens the availability of economic resources… [and] helps the overall economic development of the underprivileged population.”¹ Ensuring everyone has access to financial services and credit products helps to improve overall household income, increases the size of the economy, builds individual/household asset holdings, increases financial and health security, reduces vulnerability and encourages job development.²

Certain Credit Reporting Agencies in various regions won’t recognize credit history from other countries, effectively ensuring the immigrant population remains unbanked/underbanked. Minorities have faced discriminatory banking practices for decades, including the varied pricing of financial products based on region or neighborhood, not having physical bank branches in lower income areas and exorbitant overdraft fees. 28% of American Black and Latinx households have no traditional credit history on file; leaving 43% of Latinx and 47% of Black households in the United States unbanked or underbanked. Yet research suggests that by 2044 the U.S. will be a majority people-of-color nation – not only should financial inclusion for all be a moral obligation and basic human right, it will also be essential for the future health of the American economy. While these examples may speak to North America more specifically, the issues of inclusion are critical in all parts of the globe.

These ten innovative organizations are focused on offering financial products and services geared to the unique needs of these populations:

• Camino Financial: A family-owned success story, Camino Financial is devoted to helping small Latinx businesses thrive, offering simple, affordable loans to small businesses who may not have access to credit otherwise. Helping these small businesses in low-to-moderate income communities help to ensure sustainable business growth and encourages job development.

• Greenwood: A digital mobile banking experience, Greenwood is focused on Black and Latinx customers, aimed at helping its customers save money and recirculate wealth throughout the community. With charitable donations including feeding meals to families when an account is created, donations to non-profits, and small business grants to Black and Latinx-owned businesses, the company also focuses on entertaining educational content geared to the specific need of their customers.

• First Boulevard: This neobank aimed at Black Americans focuses on helping the community build generational wealth and control spending. With no minimum balance required, financial education programs and real-time insights and recommendations based on purchase history, First Boulevard believes that controlling finances is one way to help fight systemic racism.

• Cheese: Asian immigrants face unique challenges when accessing financial services, particularly around language requirements. Cheese offers customer support in both English and Chinese, customer messaging via WhatsApp, and even cashback on purchases from Asian-owned businesses.

• Proto: Canada, known for its vast multiculturalism, is also home to Proto, a tech company focused on inclusive chatbots and multi-lingual contact center automation. Focused on emerging financial services markets in Asia and Africa, Proto allows first-time consumers to access support in a variety of languages and ways, including via SMS and other messaging apps.

• DreamStart Labs: In community savings groups, transactions are often calculated by hand, on paper, with cash stored in informal ways including lockboxes. DreamStart Labs provides mobile apps that enable these unbanked individuals to conduct transactions, build credit history, save money and connect to formal banks. To date, the company has enabled thousands of savings groups across Africa, Asia and Latin America to formalize their banking.

• Purple: A mobile banking platform, Purple aims to empower individuals with disabilities to achieve financial independence. Often overlooked by traditional financial institutions, people with disabilities are more likely to be unbanked/underbanked than those living without disabilities. With no hidden fees, no minimum balance, and the ability to easily track spending, the company also donates a portion of revenue from each debit card swipe to the Special Olympics.

• BABB: When BABB founder Rushd Averroes moved from Yemen to the U.K., he found himself unable to open a traditional bank account. With the belief that everyone deserves to have access to basic financial services, BABB was created to address the issue – aiming to decentralize banking and offering peer-to-peer banking services to the global micro-economy, this fintech is bringing financial inclusion to as many individuals as possible.

• BCIF: The Black Cooperative Investment Fund, founded in 2016, is a community-based organization providing microloans to the Black community while raising awareness about the importance of economic empowerment, equity and wealth building. Focusing specifically on the Southern California region of the United States, BCIF has a long-term vision of providing dedicated, reliable, perpetual sources of capital to help create assets and build generational wealth for the local community.

• Welcome Tech: Based in the United States, Welcome Tech leverages proprietary data to provide tailored financial services and trusted info to immigrant families. Using machine learning technology, financial education programs and personalized service offerings including debit accounts/cards, a portfolio of monetary award options and consumer credit products, Welcome Tech aims to improve financial inclusion among the millions of underbanked/unbanked immigrants in the U.S.

Our understanding of the world and all of the people and identities living in it continues to evolve. And so must the way we do business and develop products and services. As digital transformation takes the world by storm, financial services organizations have a unique opportunity to shift from a product-focused mindset to one that is more centered on their audience.³ What do most audiences want? To be seen, heard and understood.

For more inspiration on fintechs/finservs doing good in the world, check out the other blogs in our Giving Thanks series:  Fintechs/Finservs Encouraging Environmental Sustainability and Fintechs/Finservs Helping Women Be More Financially Secure.

And for more information on how an all-in-one risk decisioning ecosystem can make innovating in fintech even easier, check out our AI-Powered Risk Decisioning Platform eBook.

Resources:

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• https://www.business-standard.com/about/what-is-financial-inclusion 
• https://finca.org/blogs/financial-inclusion-matters/
• https://bbgventures.medium.com/not-another-neobank-why-the-market-is-overcrowded-and-where-bbgv-sees-opportunity-835ebd231154

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If you live in or near the United States, everything in the month of November is Thanksgiving themed. But even if you don’t celebrate U.S. Turkey Day, there’s still a lot to be thankful for as the year 2021 slowly winds down. To help celebrate, we’ve been looking at financial services organizations and fintechs that work to help populations that remain underserved by more traditional institutions, as well as innovative organizations that aim to encourage sustainability and help further the goals of environmental activism. As digital transformation continues to evolve rapidly, financial services organizations have a unique opportunity to shift from a product focus to a more audience-centric one.¹ And what do customers want these days? They want to engage with companies that truly match their values – not just as lip-service, but those that really walk-the-walk.

The United Nations has released 17 Sustainable Development Goals (SDG) as a way for institutions of all types to ensure they are making both short and long-term investments in products and services that further sustainable projects. These goals include everything from Clean Water and Clean Energy to Responsible Consumption and Climate Action.² And consumers are readily looking at the products and services they consume to see how they stack up.

Check out these ten organizations focused on offering sustainable financial services/products:

• Ekko: Based in the UK, this climate-friendly debit card, app and finance platform helps consumers fight climate change, just from using their services. For every five transactions using their debit card, Ekko pays for an ocean-bound plastic bottle to be collected, and at every 50 transactions they pay for a tree to be planted. The app allows you to track the impact your purchases have had on the environment and they’ve even created an entire marketplace of sustainable products and services to further the cause.

• MasterCard’s Priceless Planet Coalition: As part of MasterCard’s extensive variety of offerings, the Priceless Planet Coalition aims to restore 100 million trees by 2025, focusing on regions that represent the greatest global need of forest regrowth. The program is dedicated to creating visibility around the carbon footprint of producing/consuming certain products and collaborates with both local communities and stakeholders.

• Stripe Climate: A service launched by Irish-American payment-provider Stripe, Stripe Climate allows businesses to direct a portion of revenue to help scale and grow emerging carbon removal technologies. Available globally, 100% of contributions from participating businesses is directed to carbon removal, with on-hand scientific advisors to help maximize long-term impact.

• Trine: Swedish company Trine is on a mission to make it easier for people to invest in solar energy in growing markets, enabling participants to earn a profit while making both a social and environmental impact. Once you set up an account, you can choose which solar partner to invest in – if that solar partner/borrower succeeds, you’ll get back your investment with interest, all while helping to further green energy sources.

• Aspiration: A U.S.-based challenger bank, Aspiration vows to help customers “spend, save and invest with a conscience.” With a promise to never use deposit money or revenue to fund oil or coal projects, the company also plants trees on behalf of consumers by allowing them to round up to the nearest dollar on debit card purchases. They also offer a Planet Protection program, which helps to offset the climate impact from every gallon of gas you purchase for your vehicle.

• Treelion: This sustainable fintech company has developed a blockchain-based solution enabling a decentralized network that launches and manages green digital projects. Based in Singapore, the company is dedicated to the green economy and helping to ensure the creation and success of large-scale green digital ecosystems. With a mission to “create an inclusive green financial ecosystem to improve the global environment,” the Treelion Foundation aims to create a global sustainable ecological business model.

• Green Fintech Network: Established in 2020 by the Swiss government, the Green Fintech Network is an action plan containing 16 concrete proposals for digital technology and sustainable finance – including proposals around a platform for sustainability data, the creation of an innovation challenge for green fintech startups, the broad promotion of open finance, and the expansion of funding for green fintechs. Hoping to make Switzerland a global leader in sustainable financial services, the action plan aims to provide incentives for the business community to drive innovative, green solutions.

• Joro: Powered by smart spending analytics, this fintech provides insights on how purchases contribute towards carbon emissions, enabling consumers to make more informed shopping decisions. This U.S. company allows consumers to “track, reduce and offset” carbon emissions of purchases, and compensate for those unavoidable purchases that result in carbon emissions by supporting a broad portfolio of carbon projects.

• Ecolytiq: Offering ‘Sustainability-as-a-Service,’ this German fintech provides banks and financial institutions with the digital infrastructure necessary for them to offer consumers ‘green finance,’ including everything from personalized impact offsetting to ESG investments. Ecolytiq offers a comprehensive sustainable banking solution that uses the Open Payment Standard released by the EU, utilizing the latest scientific research and machine learning technology to analyze individual banking transactions and offer personalized environmental footprints.

• Novus: This UK fintech, in partnership with Visa and Railsbank, provides a mobile banking app that rewards users for sustainable purchases. Consumers earn ‘impact coins’ for purchases made on the card and can then use those coins to help support various green initiatives, including ocean conservation and reforestation. Novus also allows you to track your carbon footprint, enabling you to understand which purchases are the most sustainable and providing ways to offset carbon-emitting consumption by contributing to environmental projects available directly in their app.

As the world continues to sharpen its focus on climate change, carbon emissions, reforestation and other facets of environmental activism, the business opportunity for fintechs who can respond to this need continues to expand. Younger consumers in particular have helped stimulate the growth of green finance and sustainable investment – but it’s not just millennials interested in these options anymore.³

Increasingly, consumers are not tied to traditional financial institutions and will shop around for organizations that help further causes they believe in. As Alex Johnson, Director of Fintech Research at Cornerstone Advisors said, “Consumers… want sustainability built into the products they use on a daily basis. Checking accounts, for example. Are you building a deposit, investment or lending product? You better have a plan for how usage of your product positively impacts the environment.”⁴

For more inspiration on fintechs/finservs doing good in the world, check out the other blogs in our Giving Thanks series: Fintechs/Finservs Helping Women Be More Financially Secure and Fintechs/Finservs Aimed at Solving the Unique Needs of Minorities.

And for more information on how an all-in-one risk decisioning ecosystem can make innovating in fintech even easier, check out our AI-Powered Risk Decisioning Platform eBook.

Resources:

1. https://bbgventures.medium.com/not-another-neobank-why-the-market-is-overcrowded-and-where-bbgv-sees-opportunity-835ebd231154
2. https://sdgs.un.org/goals  
3. https://www.cnbc.com/2021/05/21/millennials-spurred-growth-in-esg-investing-now-all-ages-are-on-board.html  
4. https://newsletter.fintechtakes.com/p/what-do-customers-want-from-fintech

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2019 has flown by, and even though it feels like we just welcomed in the new year, there’s less than two weeks to go until 2020! This year was incredibly exciting for the Provenir team as we expanded into Canada, opened offices in San Francisco and Miami, grew our Europe and Asia-Pacific teams, and extended our footprint in Latin America.

As a global company we love to learn about the industry trends and innovation opportunities our teams are witnessing in their respective regions. It’s a great chance to learn from regional trends and spot new innovation opportunities! So, we asked our team of sales executives from around the globe to share their answer to the following question:

The Americas
Brendan Deakin, Sales Executive – Northeast US Region

The industry saw three key areas of innovation during 2019:

1. The launch of Open Banking/API driven access to financial services is driving up innovation of, and consumer access to, personalized banking services vs. a historical one-size fits all/product penetration focus by most banks.
2. More and more established players are committed to the digital channel like never before. This is being done to fight the competition from new FinTechs, which continued to grow in number throughout the year.
3. AI and Data Science are taking hold, banks are looking to leverage the massive amounts of data they generate through customer interactions, product utility, etc. This is actually creating a new paradigm in the market, where banks can look to reduce their reliance on 3rd party vendors like Credit Bureaus in the future by leveraging all of the “on us” data on consumers. This will help them build better cross-sell and up-sell opportunities for existing customers while also building acquisition strategies based on these massive data sets.

Dominic Schaffer, VP of Sales – US West Region

The US will look back on 2019 as a landmark year for alternative data! In their recent statement the Federal Reserve Board, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the National Credit Union Administration, announced support for the use of alternative data in credit underwriting. In summary, the agencies said that alternative data can:

•  Improve the speed and accuracy of credit decisions
• Help firms evaluate creditworthiness of people who might not be able to get credit in the traditional system
• Help users get better pricing & terms

With the use of alternative data greenlit, when used in compliance with existing rules, lenders can explore a huge range of data to drive smarter decisioning. We’ve also seen a big focus on cash flow analysis—basically analyzing a user’s income and expenses over a period of time to figure out the borrower’s capacity to repay a loan.

Julie Mannella, Director of Sales – Canada

With the Canadian economy being driven by the consumer-first mindset 2019 saw increased pressure for businesses to deliver world-class user experiences. Consumers are demanding that their financial institutions deliver a frictionless, convenient digital experience. They want single-platform engagement and easier access to the products and services, with rapid delivery and value delivered for their money. This is leading organizations to rely on their IT team to drive transformation and innovation in more ways than ever before, putting a strain on these business units to deliver.

Gaston Peralta, Director of Business Development – Latin America

2019 was a big year for financial services in Latin America with an increase in venture capital and investments from large financial institutions into FinTechs is a highlight. Capital investments in startups and FinTechs are surpassing the 3 billion USD mark in Latin America alone. This kind of capital has never been seen before according to Andre Maciel from Softbank, which manages a 5 billion USD investment fund dedicated solely to Latin America. Maciel also claims that they have their mindset on 300 additional capital contributions to Fintechs in LATAM, with 200 of those in Brazil.

The expansion of nontraditional lenders, in the form of marketplace lenders, replacing banks for previously underserved markets, was also a key shift in the industry. Lenders are exploring the inclusion of Social Media to create financial identities and data from alternative sources has replaced the use of traditional credit scores to extend credit options into sub-prime and thin file markets.

Europe
Chris Kneen, Regional Sales Manager – United Kingdom

Over the last 3 years, there has been a surge in new challenger banks entering the UK market, set up to disrupt the sector and compete with the incumbents. This growth has accelerated in 2019 with Monzo, Starling Bank, and Revolut gaining a higher volume of customers. Setting up an account has become simple, fast and frictionless with innovative use of video identity verification.

2019 has also seen a second wave of challenger banks that are challenging the first breed including Tide, Bunq, Monese, Curve and Tandem. Natwest has also launched its standalone brand Bo to compete in this segment. Increased competition is great for innovation, but whilst the new challenger banks are gaining customers in impressive volumes, there’s a question around how many are switching their primary accounts. Monzo has 3 million UK customers, out of which, 1 million customers have fully committed to using a primary account. This 1 in 3 ratio will be something Monzo will be looking to improve on in 2020. Figures announced recently also show that only 14% of Curve’s 500,000 customers are ‘active users’.

Marcus von Rahden, Regional Manager – Central and Eastern Europe

Throughout 2019, the Central and Eastern Europe market has been fast-moving, with lots of innovation across the finance sector. There’s been continued investment and expansion in larger Fintechs including Numbrs, N26, Wefox, and Adyen. We’ve seen comparison platform Check24 apply for a banking license, several new mobile-first consumer and SME lenders launch to market and open banking payments solutions developed following the introduction of the PSD2 regulations.

Inigo Rodriguez Navarro, Regional Sales Manager – Iberia

2019 has seen many banks and lenders working hard to boost innovation following the introduction of the PSD2 payment regulations. Although there have been delays in publication of the technical standards the new regulations created an opportunity for disruption. Institutions such as BBVA have been leading the way in Spain, partnering with new FinTechs to create disruptive models through open APIs and platforms. The transition period is set to continue throughout 2020 when further technical requirements are rolled-out.

The Spanish FinTech ecosystem is growing tremendously and the sector generates over 5,000 jobs, which is set to double in 2020. The emergence of ID Finance, Bnext, and Pagantis shows the growing strength and diversity of the market, alongside the established banks.

Patrick Radise, Senior Sales Executive – Nordics and Baltics

Many new FinTech and startups entered the lending market across the Nordics and Baltics in 2019. They compete with better speed, technology, and lower cost/overhead. Klarna and iZettle have been great examples of payment businesses that have scaled their models globally in a rapid timeframe.

The use of automation and AI/ML grew. Many, especially in the Baltics already have automated consumer loan processes with many aiming for a 95% automation rate for consumer products and a slightly lower percentage for the B2B segment. Most banks are already using machine learning technology for areas like Anti Money Laundering, Fraud, and Customer Relationship Management, and exploring its use in lending processes.

Finally, there’s been an increased focus on Green loans, which are increasingly attracting Millennials and environmentally conscious people.

Asia-Pacific
Tim Kerslake, Account Director – Australia and New Zealand

For Australia, the most significant event in 2019 was the delivery of the final report of the Royal Commission into Banking (Feb 2019) and the subsequent consequences. Following the report, two of the region’s major banks—National Australia Bank and Westpac—had senior leadership changes, we’ve seen increased vigilance from the regulators ASIC and APRA, and there’s an increased focus on responsible lending practices.

Australia and New Zealand saw the continued rise of the Buy Now Pay Later segment both in terms of growth of transactions/value as well as the number of entrants. This sector is led by AfterPay which has commenced a global expansion. We also saw an announcement by Klarna that they will launch in Australia and an investment by Commonwealth Bank into Klarna.

Patrick Tan, Regional Sales Director – Singapore

Overall in 2019, the banking sector has been playing catch up with FinTechs by either using their technologies or collaborating with them. Banks are also increasingly investing in startups, hoping to catch the latest technologies and keep them close by.

2019 also saw a huge rise in mobile digital transactions, which helped drive an increase in mobile payment apps that facilitate the transfer of funds for purchases. For example, digital and mobile payments make up 30% of the FinTech industry in Thailand.

The potential for FinTechs to disrupt financial services is tremendous. Banks, who are slow to market and heavily regulated by central banks, have struggled to grow adoption of bank services in the region with only 27% of the adult population owning a bank account. 2019 saw FinTech companies, who are nimble and less impeded by regulations, tap into this lack of access to financial services with Grab and other similar tech companies venturing into the digital payments sector.