The Role of FinTech in Financial Inclusion, Poverty Alleviation, and Financial Stability

Financial technology or FinTech encompasses a broad range of technological innovations that enable financial solutions. FinTech providers bring trust and transparency, offering newer services at lower costs on accessible and well-designed platforms or mobile apps that are appealing to their consumers and penetrate areas with poor banking infrastructure. The impact of FinTech can be seen from an economic perspective, as it has transformed the speed, efficiency, reliability, and availability of financial services, leading to overall economic growth and prosperity. This is remarkable, despite the inherent risks and vulnerabilities within a digital financial ecosystem that needs to be monitored and regulated. In this chapter, however, we take a slightly different perspective and focus on the social impact of FinTech. Thus, we examine how breakthrough technologies in FinTech help countries deal with lack of financial inclusion by providing financial resources and access to unbanked populations. The broader impacts of such financial inclusion are also explored within the context of poverty and achieving greater financial stability. The impact and implications of FinTech also play a role in addressing the grand challenges of our time—namely, poverty alleviation, financial inclusion, and financial stability across all population demographics.