Fintech companies are reshaping the way we interact with money and financial services, and their impact goes beyond just convenience and efficiency. A fintech, or financial technology company, is an innovative organization that leverages digital technology to provide a wide range of financial services, including digital banking, mobile payments and microfinance. Fintechs often utilize cutting-edge technology, such as blockchain and cryptocurrency, to enhance financial transparency and sustainability, contributing to the broader goals of sustainable finance and impact investing.
One crucial area where fintechs are making a difference is in driving financial inclusion, particularly for women. The statistics are telling – from the gender disparity in venture capital funding to the lack of formal financial access for women globally. Digital financial services can serve as an on-ramp for low-income women to adopt and use a large suite of formal financial products and services, expanding women’s choices and their financial and economic resilience and empowerment. Low-income women represent a large, untapped market opportunity for digital financial services providers, particularly fintechs leveraging technology to close the gender gap in financial services.
The Gender Disparity in Funding
In 2021, female-founded start-ups in the US secured a massive $6.6 billion in funding. However, this impressive figure accounts for just 2.1% of the total venture capital investment, leaving the lion’s share to male-owned businesses. Such an imbalance perpetuates the existing gender gap and hinders women’s economic empowerment. Fintechs have the potential to be a driving force in changing this scenario. By offering accessible and inclusive financial services, fintechs create opportunities for women entrepreneurs to access the capital they need to bring their innovative ideas to life.
Empowering Through Technology
Inclusive fintechs are at the forefront of leveraging technology to reach underserved populations, particularly women in remote areas. These innovative platforms offer a range of services such as mobile banking and digital payments, tailoring their offerings to suit the unique needs of women. The result is that women can now save, invest, and manage their finances efficiently, regardless of their geographical location. By breaking down the traditional barriers of access, fintechs are ensuring that women have the tools they need to control their financial destinies.
How Women’s World Banking Shines a Light on Fintechs
Women’s World Banking is working to change the fintech landscape to drive women’s financial inclusion. One such initiative is the Fintech Innovation Challenge, which identifies and highlights fintechs working to break the persistent barriers in serving the low-income women’s market using an innovative technological solution. And even though only 1% of fintechs are founded by women, the Fintech Innovation Challenge has seen strong engagement from female founders, with 66% of this year’s applicants being women-founded—though men-led fintechs are always encouraged to apply and compete.
The Female Founder’s Circle is another way Women’s World Banking is supporting female fintech founders. It is a community of female founders who come together to share, learn and support each other on specific issues that women working in this space may face.
Finally, fintechs working to provide solutions to underserved, low-income women should consider joining Women’s World Banking’s Global Network. This exclusive group of more than 68 financial services providers from around the world come together as a Global Network to share best practices and leverage their expertise to acquire, activate, drive usage and retain their women customers.
What the Fintech Future Holds
While women face several challenges in gaining access to formal financial services and capital, the synergy between fintech and financial inclusion offers a glimmer of hope. Fintech companies are uniquely positioned to bridge the gender gap by providing innovative and tailored solutions to women, especially those in low-income and underserved communities. Meanwhile, Women’s World Banking is working to foster innovation and inclusion by providing fintechs, particularly those founded by women, the opportunity to showcase their work on a large stage. By embracing fintech, we not only empower women financially but also unlock immense economic potential on a global scale. As fintech continues to evolve, we can look forward to a more inclusive and equitable financial landscape for all.