Banking and Finance Innovations That Give New Meaning to DEI
Financial accessibility is the cornerstone of a thriving economy, but it's also necessary for a fair-minded society where more people have a chance to succeed.
According to the World Bank, 24% of adults worldwide still do not have a bank account. In America, numerous individuals within underserved communities lack the financial resources many Americans take for granted. Bank accounts, for example, are beyond the reach of many minorities, making it difficult to provide documentation of income and savings, obtain loans and insurance, or even plan financially for the future.
Fortunately, financial regulators have committed to investing in more accessible financial tools, technologies and services for those who benefit most from them, giving new meaning to diversity, equity and inclusion (DEI). Case in point? The Financial Conduct Authority issued a guide on how firms can ensure fair treatment for vulnerable customers and meet their unique needs.
As CEO of a PR and marketing firm, I work with a number of clients in the finance industry and keep a close watch on trends that could impact them. With this experience and expertise, this article explores innovations that can positively impact all finance consumers, including those historically left out of finance products.
The Market for Financial Services Is Becoming More Diverse and Competitive
Over the past few years, fintech and other financial services companies entering the banking sector have introduced products intended to assist consumers in maintaining their livelihood. Moreover, advancements spurred by digital transformation and accelerated by the global pandemic have positively reshaped payment systems, lending practices, insurance regulations and wealth management. In turn, this trend has made financial services in many economies more diverse, equitable and inclusive. This represents meaningful progress in removing barriers to financial stability, with the result that many people are in a far better position to take control of their financial lives.
Still, financial institutions have much more work to do, including placing a greater focus on personalizing the customer experience. Why? To equitably support diverse consumer needs and remain competitive in a rapidly evolving market. As traditional and non-traditional financial institutions offer increasingly accessible and comprehensive financial solutions, the competition for borrowers intensifies. In light of this fact, regulators now realize that an emphasis on cross-selling is advantageous for generating revenue and increasing member retention. And it's also why some institutions are looking to utilize end-to-end consumer and mortgage technology solutions to deepen existing customer relationships and foster new ones.
Win-Win Solutions for Consumers and Financial Institutions
While demand for overall financial services remains strong, companies and institutions in the banking sector are working together across product lines to increase their competitive edge by providing borrowers with more efficient, top-tier consumer lending and homebuying experiences. They're also capturing value from technological investment and digital trends that include mobile money, cloud services, and AI — all in the service of promoting a more equitable and secure financial system.
Meridian Link, a loan and mortgage origination company, provides its members with debt optimization technology, automating the process for mortgage loan closure. With a single click, analysis can be run on a consumer's financial data. Information from this analysis provides instant insight into the status of the consumer's debt and whether it can be consolidated or refinanced. The advantage to the consumer is the possibility of qualifying for a more competitive mortgage rate than might otherwise be possible. The advantage to financial institutions is the increased opportunity for cross-selling during the post-closure process and promotion of other consumer lending products, such as credit cards, pre-qualified auto loans and personal loans. In other words, debt optimization technologies like those adopted by Meridian Link represent win-win solutions for both consumers and financial institutions.
Innovative, Consumer-focused Solutions
Financial institutions are invested in reducing the risk of default by determining whether consumers can repay loans within designated periods. Credit scores represent the chief metric for making this determination, and as most consumers understand, without a solid score, it's game over. Experian is helping consumers take control of their financial health and desire to monitor, manage and enhance their credit scores. Experian Boost now brings the opportunity to connect residential rent payments to their Experian credit file, which can help boost the FICO score. Once enrolled in a free or paid Experian membership, consumers can opt in and allow access to the checking, savings or credit card accounts from which rent payments are drawn, enabling Experian to find those rent payments within the qualifying denomination range. This consumer-focused solution sets Experian Boost apart as the only feature that can instantly improve consumers' FICO Scores and empower them to achieve greater financial security and freedom.
The Future of Banking and Finance: Driving DEI on New Terms
Momentum for financial change is mounting worldwide, driving more diverse, equitable and inclusive markets — especially for developing economies and underserved communities. By removing barriers to entry and providing tools, technologies and services to those most benefitted by them, the banking and financial sectors are poised to play an ever-increasing and influential role in DEI that, quite literally, puts its money where its mouth is.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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