Blog article
See all stories »

Can Fintech Really Save the Billions of Under and Unbanked in the World?

There is a growing concern for the large number of underbanked and unbanked members in our society. While there has been a drop from 8% in 2011 to 6.5% in 2017 of underbanked and unbanked people in the US, the world has now more than 1.5 billion people still living without a bank account.

It can be easy to dismiss this as a poverty issue, but it isn’t always the case. Billions of people in the US and abroad still decide to live in rural areas, and prefer to rely on non-bank alternatives when they can’t get to a local branch. The Fintech industry seems to be the only one to be truly concerned about the situation, and actually trying to do something about it. But can Fintech really be the savior for the myriads of unbanked and underbanked still in the world today?

How Did We Get There?

We have to go back to the great recession of 2000 to understand why so many Americans are left with no bank account. During this period, many major banks either had to close their doors or restructure. The biggest casualties here were rural markets. Bank of America alone closed around 1600 locations at that time, many in rural areas.

As a result, people in these remote areas ended up being in a “no banks land” where they couldn’t even get access to basic services such as ATMs. These people also had to resort to less than reputable services to cash checks, such as payday lenders and kiosk businesses among others.

Fintech seems to be the only solution to those living in rural areas who can’t afford to drive hours to get to their nearest branch. It’s also a godsend for another class as well.

Fintech Brings Credit Worthiness to the Unbanked

Another issue facing a lot of unbanked and underbanked households in this country is establishing credit. People who live in these kinds of areas, or people who haven’t used banks for financial products can have difficult building credit in a conventional way.

But there are already Fintech solutions on the rise that will allow the unbanked to prove their credit worthiness while bypassing the major bureaus. Uulala for instance is a platform that allows users to earn credit based on everyday transactions. The platform uses algorithms that monitor behavioural habits and purchase history to predict financial ability at any given time. This model could revolutionize loan services for the unbanked, their relation with credit, and their buying power as well.

Online Loans Favour the Unbanked

While the average person living in rural America may not have access to high speed broadband, satellite technology has made some advances over the last few years, which allows them to access online lenders. Online lenders allows them to apply for loans from distance with little to no paperwork, and more importantly, without having to go to a branch. Banks should not underestimate the edge these lenders will have in the future on this demographic. A demographic that needs advance funds just as much as the rest of the population, but is still largely underserved and ignored.


Fintech is set the turn whole world of financial services on its head, and will revolutionize how people who are underserved by banks deal with money. We can expect more companies to realize the potential and opportunities the under and unbanked present, and capitalize by truly understanding their realities.



Comments: (1)

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 24 September, 2019, 14:27Be the first to give this comment the thumbs up 0 likes

Perhaps the greatest strength of fintech in dealing with the so-called under & unbanked is its effort to help people accomplish the financial tasks they want/need to do rather than banks that want to force people to do the tasks that banks need/want.