ETA report highlights financial inclusion

The race to digital financial services, accelerated by the COVID-19 pandemic, impacted marginalized consumers who rely on legacy financial systems. An Electronic Transactions Association white paper, published Feb. 7, 2022, details efforts by ETA member companies to improve access to a range of digital products and services in the past two years.

Coauthored by the ETA's Jeff Patchen, manager of government affairs, and Scott Talbott, senior vice president, government affairs, Industry Insights: Creating a More Inclusive Economy: How Fintech Advances Digital Resources for Underserved Communities, reviews financial inclusion initiatives, beginning with the fintech community's outreach during early stages of the pandemic in 2020 and continuing into 2021.

Jodie Kelley, CEO at ETA, commended ETA member companies for improving consumer access to vital services. "ETA members have raised the bar, meeting and exceeding expectations during a crucial moment in history," she said. "The progress made these past two years is going to continue to reap great dividends for society in the future."

Customer-centric approach

Scott Talbott agreed fintechs and payments industry stakeholders have improved access to services while creating healthy competition in the market. "The number of players and multitude of products and services have helped drive down prices," he said.

Across a diversity of offerings, Talbott found a guiding principle among service providers was the concept of meeting customers where they want to be, unlike in the past, when consumers had to travel to products and services at offices, banks and stores.

"Today, these products are designed to meet consumers where they're headed and where they're going to be," Talbott said. "And that fundamental shift in focus is technology-enabled. We're not tethered to bricks and mortar or the old way of thinking because today's products meet us wherever we are headed."

Access, availability, affordability

Talbott noted that financial services have become more available, accessible and affordable for all consumers. He further pointed out that the electronic payments industry provided significant economic relief during the pandemic, facilitating billions of dollars in benefits quickly and securely to provide urgently needed relief to individuals and small businesses.

He also cited additional areas of progress covered in the report, as follows:

• Open finance: Gave consumers convenient ways to manage their finances while providing them control over who can access their financial data.

• Prepaid products: Provided convenient payment options for millions of consumers with limited or no access to traditional financial accounts.

• Nontraditional payments: Enabled choice for cashing a paycheck or transferring funds between individuals through solutions to manage, move and spend money conveniently and cost-effectively.

• Financial literacy and readiness programs: Educated adults and teens on today's modern financial products and services, giving them knowledge and tools to manage finances, use fintech and invest for the future.

• Mobile banking services and innovations in ADA compliance: Fostered financial independence and security for demographic groups that lack easy access to physical FI branches, such as consumers in rural areas, the elderly and individuals with disabilities.

• Mobile payments: Allowed consumers to pay for goods and services safely and cost-effectively while facilitating greater financial literacy by enabling consumers to manage their accounts from their mobile phones.

• Peer-2-peer payments: Changed the way individuals exchange money with each other by enabling the secure, instantaneous transfer of funds via mobile applications.

• Cross-border payments: Empowered consumers with cheaper, faster and more accessible international payments by transforming the global financial landscape.

• Expanded internet access: Offered affordable internet access in underserved communities domestically and abroad by improving infrastructure and reducing costs.

• Online small business lending: Expanded access to credit and offered affordable alternatives to traditional loans for small businesses seeking to grow.

• Interactive, automated tellers: Transformed traditional FI branches, establishing a new model with a smaller physical footprint and offering a wider range of services at more convenient times.

• Diversity, equity and inclusion: Spearheaded by ETA members, created an environment where all colleagues can be themselves and truly feel included.

"Today it's easy to receive, hold and spend your money," Talbott said. "You can access your finances from your phone and if you still are cash based, there are ways to help you use your cash to buy things on the internet, and with prices going down, we're making great strides in helping the underserved."

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