In recent years, FinTech has grown into a massive industry with a lot of potential. New technology and clever innovations have given consumers new ways to manage their money, invest responsibly, borrow responsibly, and spend responsibly. If you think about it, that’s an awful lot of responsibility. But as wonderful as this technology is for consumers around the world, there’s always room for doing more good in the world. Here, Canadian FinTech Specialists Firoz Patel shares some ideas on how FinTech companies can make a positive impact while still turning a profit.
Educate consumers about financial responsibility
One of the key factors in financial responsibility is the knowledge of how to manage money responsibly. That means knowing how to invest, save, and borrow in ways that don’t cause undue financial stress. In order to do that, consumers need to know how their money works, explains Firoz Patel.
They need to know what it is that they’re buying, how much it costs, and what it will do for them. That applies to all financial services, including FinTech products. Consumers who know how to use and manage their money responsibly are able to save more, plan for their financial futures, and avoid taking on too much debt. That has the potential to lower financial stress and improve overall mental health. Plus, it means less defaulting on loans, which saves banks and fintech companies a lot of money.
In turn, that means more resources for consumers to access financial products. Once consumers know what FinTech is and how it works, they can make more informed decisions about their finances. As a result, they’ll be less likely to take out more loans than they can really afford. That in turn will lower default rates, saving banks and FinTech companies money on collections.
Provide banking services to underserved communities
One of the biggest issues facing financial institutions at the moment is the lack of banking services among underserved communities. In certain areas of the country, and in certain communities, banks simply don’t feel like it’s worth their while to provide banking services anymore. There’s not enough profit in it. That means there are a lot of people with limited or no access to banking services.
According to Firoz Patel, founder of AlertPay Inc, a versatile and globally-used online payments solution, that can be a huge problem in terms of financial responsibility. Without a way to store money, earn interest on that money, or use that money to make purchases, it’s hard to be financially responsible. That’s why many FinTech companies are making efforts to provide banking services to underserved communities. That way, they can help people manage their money responsibly, while still turning a profit.
Partner with other FinTech companies to provide a range of services
Partnering with other FinTech companies to provide a range of services can help you give consumers a more thorough range of products and services. Consumers are more likely to use a single platform for all of their financial needs if there’s a convenient way to do so. That way, you can provide consumers with everything from basic checking and savings accounts to investment advice and credit cards. Consumers will be able to use your platform for everything from paying bills to planning for retirement. That way, you can avoid having to navigate the regulatory path of licensing and approval for each financial product in the traditional sense. That will save you a lot of time and money, while allowing you to provide consumers with a more comprehensive range of products.
Develop tools to help detect and stop financial abuse
Financial abuse is a serious problem. According to the latest studies, over 15 million U.S. households experience financial abuse every year. That’s almost 10 percent of the population. And that number is likely to be even higher in other countries around the world.
Your company has a responsibility to help combat this problem. That’s why you should consider developing tools to help detect and stop financial abuse, emphasizes Firoz Patel. That means developing tools like algorithms to monitor where money is going, who is accessing it, and why. You can also develop tools that help detect signs of financial abuse, like sudden and unexplained changes in spending or borrowing habits. That way, you can alert the proper authorities when you suspect financial abuse. This can be crucial in helping victims get the help they need.
Financial responsibility is a crucial part of being an adult. It’s what separates people who can responsibly manage their money from people who can’t control their spending. That’s why it’s so important for FinTech companies to help consumers become more responsible with their finances. In turn, that will make the world a better place. Because the financial industry is such a large and important part of the world economy, it has the potential to do a lot of good for a lot of people. In recent years, FinTech has grown into a massive industry with a lot of potential. That means there are plenty of opportunities for FinTech companies to do more good in the world.