Helen, 30 years old, never went to school, but she managed to open a kiosk where she sells fruits and vegetables. She received mobile loan to expand her business. She never popped in a formal financial institution where the probability of being denied a loan would have been high. With Fintech, she has been able to get a loan. Despite that, people are still saying Fintech didn’t deliver its promise, reason being : the number of people with a bank account didn’t significantly increased. Hold on, did fintech ever promise to increase bank account numbers ? Financial technology came to offer : an alternative and efficient way of dealing with financial transactions; a better financial inclusion, and better customer experience. Based on these three promises, let’s see if fintech has failed us.

After the 2008 financial crisis, there was a loss of trust towards banks and Financial institutions. Users lost confidence in the banking system: too opaque, too complicated, too arrogant. It’s where fintech came in promising a better way of dealing with financial transactions and finance in general. Let’s be honest, from UK, China to USA, it’s more cool and fun to track expenses, save, borrow, send and receive money, and pay for goods and services. Thanks to Fintech firms like Square, Lending Club, WeChat, Starling Bank etc. Financial transactions are now clear, fast, and cost effective. The fintech wave didn’t hurt developed countries solely, others parts of the world have been affected.

India is going cashless. The government has acknowledged the potential of fintech and its positive impact. Indian government is building a digital identity that will allow every citizen to transact in a cashless world. The country also initiated payment banks, allowing fintech players to offer to financially excluded loans. Loans are very important to MSMEs and informal businesses.

MSMEs and informal businesses are a major component of Africa’s economy. With no credit score, no collateral to secure loans, many businesses were starving, relying on informal and costly channels to secure funding. The answer was fintech; the number of mobile loans in Africa in terms of transactions are amazing. Mobile loan is King, especially in East Africa with M-PESA leading the way. Another impact of fintech in the continent was on money transfer and savings; with a low banking penetration, it was very difficult to send and receive money, or open a bank account. Thanks to the very high mobile phone usage, many can now save, send and receive money. The number of mobile money actors speaks for itself.

I can understand that at the beginning, many thought that fintech will skyrocket the bank usage, that it was another development of banking system like credit cards, or ATM. Somehow it is, but the difference here is that the actors of change are more often external to the banking industry; they are everything from tech startups to Telcos.

Saying Fintech didn’t achieve its goals because there is not increase in bank rate usage it’s not fair. The main reason of fintech’s existence is to offer an alternative banking experience. Let’s say banks are a way to access financial services, and Fintech are another way of accessing financial services; up to both ways to work together or not.