# How fintechs can reduce inequality Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-07-06 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Building a Purpose-Driven Fintech Revolution Meta Description: Discover how fintech can drive positive impact in society by focusing on social purpose, financial inclusion, and reducing inequality. Learn more! URL: https://financedigest.com/how-fintechs-can-reduce-inequalityhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/istock-1295458543-1736815596440-compressed.jpg) _![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/213-1736815596480-compressed.jpg)_ _By **Guy Kashtan,** co-founder and CEO of_ [_Rewire_](https://www.rewire.com/uk) This is an exciting time to be in fintech. Innovation is accelerating, and new products and services are making financial services more accessible than ever before. Once complicated processes can now be completed with the swipe of a finger and open banking has put customers in the driver’s seat. This ability to [change people’s lives for the better is what puts fintech](https://www.financedigest.com/how-fintech-innovations-can-change-our-tomorrow.html "How fintech innovations can change our tomorrow") in such a unique position to have a positive, long-lasting impact on society. Yes, we’re in the [business of making money](https://www.financedigest.com/5-saas-tools-to-help-your-company-business-save-money-in-2022.html "5 SaaS Tools To Help Your Company/Business Save Money in 2022") – but we can do that and be purpose-driven at the same time. Private [companies have a crucial role to play in shaping our lives](https://www.financedigest.com/factbox-european-companies-offer-one-off-bonuses-hike-pay-amid-cost-of-living-crisis.html "Factbox-European companies offer one-off bonuses, hike pay amid cost-of-living crisis") both individually and as a society. **Building fintech with a purpose** Environmental, social and governance issues are becoming more and more important for [businesses and consumers](https://www.financedigest.com/citigroup-says-will-close-russian-consumer-commercial-business.html "Citigroup says will close Russian consumer, commercial business"). People want to know their hard-earned [cash is safe](https://www.financedigest.com/analysis-investors-face-expensive-quest-for-year-end-cash-and-safe-assets.html "Analysis-Investors face expensive quest for year-end cash and safe assets") with companies that invest and operate ethically and sustainably. But these are standard ESG requirements, and [fintech has the potential to make a difference way](https://www.financedigest.com/3-key-ways-you-can-transition-from-finance-to-fintech.html "3 key ways you can transition from finance to fintech") beyond these tick-boxes. Purpose-driven organisations are establishing a foothold in many markets, [following examples of well-established brands](https://www.financedigest.com/10-million-to-be-whipped-into-ice-cream-brand-four-winters-following-acquisition.html " Million To Be Whipped Into Ice Cream Brand Four Winters Following Acquisition ") such as Ben & Jerry’s or Patagonia. And it’s exciting to see so many fintechs taking on important causes from the off, such as [​​Wagestream](https://wagestream.com/en/), which is committed to financial wellbeing, and [Treecard](https://www.treecard.org/), which uses 80 per cent of its profits to plant trees. When you’re building a business from scratch, you can place social purpose at its core. After all, entrepreneurship is about finding solutions to problems, and there are still many social and environmental problems that governments are failing – or at least dragging their heels – to address. **Financial inequality** Inequality is one such problem. And it’s ubiquitous. The UN’s 10th Sustainable Development Goal is to [reduce inequalities](https://sdgs.un.org/goals/goal10), and governments worldwide are working away, implementing programmes and incentives to drive equality within countries and across borders. And yet progress has been slow. Enter fintech. Our industry has already made huge inroads into democratising finance, putting banking into the palm of your hand, opening up [financial markets](https://www.financedigest.com/the-political-wildcard-what-is-trumps-us-presidential-nomination-doing-to-financial-markets.html "The political wildcard: What is Trump’s US presidential nomination doing to financial markets?") and investment opportunities, and simplifying remittances. Add to this a clear purpose – such as [financial inclusion](https://www.financedigest.com/why-banks-could-stand-to-learn-a-thing-or-two-about-financial-inclusion-from-fintechs.html "Why banks could stand to learn a thing or two about financial inclusion from fintechs") or reducing poverty – and you have a social entrepreneurship-based company with the potential to reduce inequality, make a positive impact and grow its fiscal worth at the same time. **The secret** The secret is to focus on the individual while keeping an eye on the bigger picture. Focus on the [needs of each customer](https://www.financedigest.com/you-dont-need-magic-to-anticipate-your-customers-needs-just-the-right-tech.html "You don’t need magic to anticipate your customers’ needs, just the right tech") and make them your number one priority. [Design your services](https://www.financedigest.com/nanotechnology-to-spell-the-growth-quotient-gq-of-drug-designing-services-market.html "Nanotechnology to spell the growth quotient (GQ) of Drug Designing Services Market") around them – and do so with empathy. Big [banks have done a great job](https://www.financedigest.com/factbox-global-banks-take-axe-to-jobs-as-cost-pressures-mount.html "Factbox-Global banks take axe to jobs as cost pressures mount") of serving huge populations, but they cannot be all things to all people. The mainstream [services offered by traditional banks](https://www.financedigest.com/britain-seeks-to-boost-banking-services-from-fintechs.html "Britain seeks to boost banking services from fintechs") can’t meet the unique needs of minorities such as migrants. That’s one of the reasons why we have marginalised groups who are still, today, underbanked. Some of these minorities have also been excluded because they lack the [financial knowledge needed to make use of the services](https://www.financedigest.com/devops-the-secret-tool-thats-transforming-financial-services.html "DevOps: The Secret Tool that’s Transforming Financial Services") that are available. Opportunities exist to niche down. This is why we are seeing the [emergence of more and more vertical neobanks and specialist financial services](https://www.financedigest.com/top-6-trends-emerging-in-financial-services-in-2016.html "TOP 6 TRENDS EMERGING IN FINANCIAL SERVICES IN 2016") providers, who are filling in this gap and delivering increasingly tailored solutions to meet the needs of all customers. [Financial services](https://www.financedigest.com/wrapping-financial-services-in-a-security-blanket.html "Wrapping Financial Services in a Security Blanket") have been set up to serve freelancers, the LGBTQ+ community, people with disabilities and teens, as well as many other underserved markets. At [Rewire](https://www.rewire.com/uk), we aim to serve migrants from developing countries who find themselves managing finances in more than one country – the one they originally come from and the one in which they currently reside. We make cross-border [financial services accessible to them and assist with financial literacy](https://www.financedigest.com/5-ways-to-improve-your-financial-literacy.html "5 Ways to Improve Your Financial Literacy"). Our purpose is to promote financial inclusion, and to do that, we need to [run a successful business](https://www.financedigest.com/4-signs-you-have-what-it-takes-to-run-a-business.html "4 Signs You Have What It Takes to Run a Business"). In other words, our success is based on a double bottom line. **The double bottom line** The concept of a double [bottom line was developed at Harvard Business](https://www.financedigest.com/business-leaders-flexibility-for-everyone-contributes-to-gender-equality-in-the-workplace-without-affecting-your-bottom-line.html "Business leaders: flexibility for everyone contributes to gender equality in the workplace, without affecting your bottom line") School by Jed Emerson. As well as financial growth, businesses measure performance in terms of their positive [social impact](https://www.financedigest.com/meet-the-founder-of-the-web-3-decentralized-social-media-metaverse-and-on-achieving-guarantees-of-green-for-a-proof-of-impact-future.html "Meet The Founder Of The Web-3, Decentralized, Social Media Metaverse; And on Achieving ‘Guarantees of Green’ For A Proof-of –Impact- Future"). Two great examples of companies doing this are TOMS, which donates shoes and other goods for every product sold, and [MicroGen Biotech](https://microgenbiotech.com/), which aims to reduce heavy metals in crops. These businesses have taken on a social responsibility, and their success is aligned with the [positive impact](https://www.financedigest.com/broadcast-switchers-market-increasing-adoption-of-ip-live-production-technology-to-positively-impact-growth.html "Broadcast Switchers Market: Increasing Adoption of IP Live Production Technology to Positively Impact Growth") they have on the world. Of course, they are developing tools and products that are profitable, but their focus is equally divided between profitability and positive social impact. And they are certainly not in it to tick a [corporate social responsibility](https://www.financedigest.com/corporate-social-responsibility-within-the-festival-industry.html "Corporate Social Responsibility Within The Festival Industry") box. They’re committed to a cause that’s important to them, because it’s the right thing to do. **Make it count** The task of [reducing inequalities worldwide is undoubtedly the responsibility of the political system](https://www.financedigest.com/frances-dassault-systemes-shares-slump-on-reduced-licence-target.html "France’s Dassault Systemes shares slump on reduced licence target"). But private sector companies can play a critical [role in accelerating change](https://www.financedigest.com/10-ways-automation-has-changed-the-role-of-the-cfo.html "10 ways automation has changed the role of the CFO") and disrupting the status quo. Fintechs are in a unique position to be able to drive a more equal society, level access to [financial products and services](https://www.financedigest.com/31972social-engineering-in-the-financial-services-people-are-the-weakest-link-in-the-security-chain.html "Social engineering in the Financial Services : People Are The  Weakest Link in the Security Chain") and, perhaps most importantly, educate people on better financial management, so they can start to build a better future for themselves and their families. The key is to focus on better serving those that have been underbanked. Create products and services that make their lives better, but above all, do it with humanity. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---