The development of mobile technology in tandem with Fintech and banking services has meant that more people have more access to financial services without having to ever physically engage with banks and lending institutions. The evolution of digital and electronic banking has been around for decades, but it is only with the developments in smartphones and mobile technology that financial services have truly been available on a global scale. In China, around 65% of smartphone owners use their phones as a mobile wallet. From retail purchases to applying for a loan, everything can be done online, on a phone.
Developing Nations and Access to Digital Fintech
Digital financial services have been around for a few decades, but people in developing nations do not have access to digital financial services. The mobile phone has changed all of that, in just a few years. Firstly, mobile phone networks are far more prevalent than internet networks in developing nations, even in rural areas. Secondly, and perhaps more importantly, the financial barrier to entry, owning a phone, has been lowered and continues to get lower each year. Developing nations are some of the largest markets for smartphone manufacturers, and infrastructure improves every year.
Microfinance Solutions on a Mobile Phone
Fintech solutions via mobile phone have not only revolutionized the industry, but have started the evolution of eradicating poverty. Where previously, people had no access to financial services and small loans to help them start micro-businesses, now they have immediate access to Microfinance institutions (MFIs) as well as mobile banking products (M-banking). Mobile banking allows for easy access to funds without customers having to travel great distances to withdraw and deposit cash. This in turn, makes loans repayments easier and with less chance for defaulted repayments. Financial independence provided by M-banking and Microfinance products have helped reduce poverty and raise the median income in developing nations.
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