Fintech's Success With Minorities Is Largely Unsung (Except by Rappers)

Plus, Gary Gensler's latest crypto salvo.

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Fintech's Success With Minorities Is Largely Unsung (Except by Rappers)

A debate that’s been bouncing around for years is whether fintech’s innovation can truly help minority and underbanked consumers, or whether fintech is largely a 21st-century costume for financial predators that have been around for decades. (This post deals primarily with the US experience, but it’s a global question, especially in Latin America and Africa).

One critical issue is access: given that the underbanked typically have lower access to broadband and mobile phones than the rest of the population, it’s not obvious that cutting-edge tech solutions would reach them more effectively than traditional banks and legacy money transfer services (like Western Union and MoneyGram). And, as has been covered voluminously, banking services for Black Americans have been disgraceful at best; it’s little surprise that nearly half of Black households remain un- or underbanked.

But the evidence is now overwhelming that fintech is reaching the underbanked and other populations marginalized by traditional banking.