Finance for social innovation Design led upheaval in consumer financial services Design helps financial companies in providing integrated services and financial inclusion of low income populations through digital finance and microinsurance. Today, the relevance of digital finance and financial inclusion for poverty reduction and economic growth is attracting the attention of policy makers and academics, largely because of the number of issues that persist which if addressed can make digital finance work better for individuals, businesses, governments and the economy. (1) Inclusive financial systems enable poor people to save and borrow, allowing them to build their assets, invest in education and entrepreneurial ventures, and thus improve their livelihoods. In addition, the poor can smooth their consumption and insure themselves against socio-economic vulnerabilities. (2)
Service design is empathetic towards user values, supporting fintech investment platforms let users invest in socially and environmentally conscious companies. Innovative businesses are leveraging complex and intelligent algorithms, massive online communities, and cloud computing to offer more efficient and lower-cost digital versions of investment products and services traditionally provided by much larger and established institutions (3) A study by the U.S. Trust found that 69% of adults age 18–32 stated that “Investment decisions are a way to express my social, political and environmental value.” Millennials are also more accepting of high risk in support of impact investing. Seventy-two percent of adults age 18–32 stated that “I would be willing to accept a higher risk on investments in companies that have a greater positive impact on society or the environment.” (3)
1. Peterson K, Ozili D., Impact of Digital Finance on Financial Inclusion and Stability. Borsa istanbul Review (2018) 2. Ouma S. A., Odongo T. M., & Were M. (2017). Mobile financial services and financial inclusion: Is it a boon for savings mobilization? Financial Sector Development in Africa: An Overview, Volume 7, 29-35. 3. Braun L., Buggy P., Cotton M., & Kang S. (2015). Change agent (Special Interest Group Trend Report Fall 2015). SDN. 4. Salampasis D., & Mention A. (2018). Chapter 18 - FinTech: Harnessing Innovation for Financial Inclusion. Handbook of Blockchain, Digital Finance, and Inclusion, Volume 2 (451-461).
IN NO VA TIO N SO CI AL
The emergence of FinTech, the new breed between financial innovation and financial technology, which has been challenging the prevailing position of incumbent financial institutions, is providing a promising vehicle by closing the gap between unbanked, under-banked and developed societies, opening the door to the global digital economy, bringing a long-term societal transformational change leading to inclusive economic growth helping move towards a more just and equitable society. (4)
FIN AN CE
Design aids Fintech startups use virtual currencies to develop new peer to peer services in creating socially conscious decentralized finance.
Loris Cerrato Nicolò Orlando Ginevra Romagnoli Sruthy Padannappurath