A whopping two billion people don't have access to any formal financial service. To put that in perspective, that’s twice the number of

people who don’t have cell phones. Fintech represents a huge opportunity to level the playing field and help extend economic opportunity to all.

1. Fintech can reduce the cost of a bank account. Currently, the world’s financial infrastructure is inefficient, costly, and full of bloat. These inefficiencies drive the price of operating for financial institutions up, and out of the reach of lower-income communities. But if banks and other financial service providers could get make their infrastructure more efficient, these entities could reach entirely new communities and customers.

2. Fintech lets more people get loans. In the western world, we often associate loans with stress and anxiety. But if you consider that access to credit is restricted in much of the world, the ability to take out a loan represents an opportunity to independently change your own life. Without access to loans, it’s nearly impossible to go to college, buy a house, or start your own business. The importance of loans in economic growth is what led to the practice of microfinance, lending in small amounts to entrepreneurs.
   
   Microfinance organizations (MFI’s) already exist all over the world, but they often have trouble connecting with each other. Using fintech to upgrade their old financial software can mean a far more connected network of MFI’s—and more clients served. For instance, when borrowers can make small repayments right from their phones without high transfer fees, both lenders and borrowers will reap the benefits. Technology can take the already-effective practice of microfinance and make it scale to reach millions more. (microfinance piece)

3. Fintech improves remittances. Last year, the world spend $44 billion on the fees alone for remittances. People paid a total of $44 billion just to move their *own* money around. The worst part is that most remittances are from working-class folks sending money home to their families, so remittance costs disproportionately impact the poor. The social problem this presents is serious enough that even the United Nations held a panel on how to improve remittances. With digital currency, remittance costs (and time) can sharply decrease. Several startups in the cryptocurrency space are applying Bitcoin to remittances, including BitPesa and Rebittance.

4. Fintech enables more savings accounts.Remember the 2 billion people who don’t have access to formal accounts? That includes a way to save money safely and conveniently. Without a savings account, many people save their money in cash under their mattresses, or in alternate investment forms that may not be secure, like livestock. Animals do produce return on investment (they grow, and they can produce more animals), but how can you withdraw just fifty cents from a pig, and what happens if it dies? Savings accounts mean more financial literacy, safer investments, and ability to easily withdraw funds when needed.
   
   One of the most common barriers to savings accounts is physical location; if there’s no bank or MFI branch nearby, it’s extremely inconvenient, expensive, and sometimes outright impossible to open an account. But with fintech—specifically, mobile savings apps—anyone with access to a cell phone can safely save their money. For instance, in South Africa a nonprofit is developing Vumi, a multicurrency savings app for young women and girls. This is important, because when people can save, they can independently improve their own lives  and change their futures for the better.

Technology alone is not necessarily a panacea, but it’s a tool we can use to effect positive social change in the world. Here’s to all the innovations and technologies we’ll see in 2016!