The last 10 years has seen an exponential boom in the fintech industry. With that, it may appear like absolutely everyone around us now has at least one banking app on their smartphone. However, there are still large portions of the world that would be considered financially illiterate. These aren’t necessarily all third world countries either. A big factor to financial literacy is access to technology. According to the Pew Research Center, only 85% of Americans own a smartphone. That means nearly 50 million people in the US don’t have one. This could be due to a multitude of factors, the main one’s being age, income and educational attainment.
What is Financial Literacy?
There are five core components to financial literacy: earning, spending, saving and investing, borrowing and protecting. This means, to consider yourself financially literate, you must possess sufficient knowledge about the aforementioned skills to ultimately make smart money moves.
So how are Fintech companies improving financial literacy?
Inclusivity has unfortunately not been a main focus for traditional banks. For the longest time, they have stuck with the safe strategy of focusing mainly on the wealthy in well developed countries and high-income areas. However, Fintech companies are turning this concept on it’s head. A lot of these companies noticed the under-served communities as an opportunity that should not be ignored. They are willing to accept the high-risk clients that traditional banks are turning down, and provide them affordable solutions.
Besides, financial matters are not easy to wrap your head around even with the help of technology, especially if you haven’t studied the subject. Taxes and pension funds aren’t exactly hot topics that’ll break the ice at a party. If anything, this subject matter bores most people. Innovative fintech companies are aware of this. So they’ve implemented the solution of serving this information to their users in sleek and simple apps, that empower people to take charge of their finances. Here, user experience comes first. This makes it easy for individuals to digest information that ultimately sticks with us.
A prime example
The most notable fintech company that’s recently attracted a large number of users is Robinhood. They offer commission-free trading and are known for being especially welcoming to young people who are new to the financial market. First time investors in their 20s make up a large percentage of their user base and the Robinhood craze is spreading rapidly amongst Gen Zers as well.
So how did they pull it off? By making their product accessible, understandable and shareable.
- As mentioned previously, they are commission-free. No need to put large sums of money on the table to take part.
- They’ve also devoted a considerable amount of their resources towards UX (user experience) to present their product in an attractive and simple interface.
- And lastly, they’ve implemented a feature which allows users to earn free stock when inviting friends to join, turning their users into ambassadors.
By using this strategy they have encouraged interest in the stock market in millions of young people, who have become their devoted users and helped Robinhood reach their over $30 billion value.
How is PayPugs doing their part?
PayPugs’ “high touch – high tech” approach is a prime example of a fintech company improving financial literacy. This is done by not only providing our clients the latest technology, but also guiding them and ensuring that they are familiar with all the turning gears of the process. One of our company values is transparency. This means all parts of the process are thoroughly explained to our clients. A friendly and personalised method is another value we are proud of. Any questions you may have will be answered in a clear and understandable language.
With PayPugs, you will be assigned a personal manager, who will find a tailored solution for you and talk you through the entire process. Book a call with us today, to find out how we can help!