Financial Technology Trends in the Underbanked Market

An emerging industry of financial services technology startups, known as FinTech, are creating a new wave of products for financially underserved customers. The underbanked market in the United States is currently estimated at $78 billion in annual revenue, serving 68 million consumers across 22 different financial product types. The Center for Financial Services Innovation and Core Innovation Capital co-released Financial Technology Trends in the Underbanked Market on May 7, 2013.

This report examines four key trends in emerging financial technologies impacting the underbanked marketplace today and highlights a selection of noteworthy companies capitalizing on these trends to improve consumer financial health and their own bottom line. The trends include:

  • Harnessing Social Networks: The power of the crowd – online communities easily linked and self-sorted for mass communication and organization – can influence personal financial management, enable opportunities for peer-to-peer lending, and improve the quality and depth of data used to identify credit risk.
  • Solving the Cash In/Out Problem: Digital payment networks can smoothly transition funds to cash and back again through secure loading, single-click purchasing, and other real-time touch points for the many consumers who continue to prefer cash in an increasingly electronic financial world.
  • Leveraging Big Data for Better Risk Management: Advanced analytic tools for credit evaluation, account monitoring, and risk management are unlocking access to new sources of available capital and a wider field of qualified borrowers with greater accuracy.
  • Scaling Up by Going B2B2C: Startup companies are exploiting B2B distribution channels to rapidly reach their target underserved consumer base through white label products and innovative partnerships between new and established industry players.

This paper has been sponsored by Morgan Stanley and has benefited greatly from the company’s strategic input. 

Click here to download Financial Technology Trends in the Underbanked Market.

 

 

Author Name: 
Rob Levy
Arjan Schütte
Eva Wolkowitz