Financial Services

1. Embed education into the way you communicate your products or services.

• Ensure your team fully understands the current financial system barriers that exist before starting to build any product awareness strategy.

• Ensure that marketing materials use inclusive language and imagery.

• Meet people where they are, incorporate different levels of complexity into your marketing materials.

• Explicitly address how people with disabilities can navigate your products.

• Provide financial literacy when marketing products to ensure that the economically marginalized groups are aware of the benefits and uses of various offerings.

• Ensure that educational materials account for different learning styles, modalities, or cultural differences.

• Prioritize empowerment in marketing language.

• Avoid using jargon or industry-specific terms whenever possible; otherwise, clearly define the words you’re using.

2. Design for accessibility of many peoples vs. prioritization of limited peoples.

• Ensure your team fully understands the current financial system barriers that exist before starting to build any product accessibility strategy. 

• Define the “target market” broadly.

  • Seek to provide access to fair, affordable, and appropriate financial products and services for as wide a population as possible—regardless of their place and circumstance of birth, their upbringing, having well-connected relatives or friends, their religion, sex, ethnicity, race, caste, disability, age, gender identity, sexual orientation, and not limited to the ones listed.

  • Consider the holistic benefit of making your product and service accessible to more than traditional target markets, including emerging markets or historically underserved or underbanked populations. This likely requires considering lower-income customers (other than the ones you have now) who will grow to become more profitable over time.

  • Collect representative data during your target market creation; use this to check assumptions that only a certain demographic has a particular set of needs.

  • Ensure that your definition of your target market is not biased by assumptions related to identity.

  • Identify user segments you already target and build partnerships to reach those who have not traditionally been included.

• Remove barriers to participation.

  • Proactively seek to identify and remove barriers that prevent underrepresented individuals from participating in financial systems. 

  • Think creatively about replacing barriers to participation (e.g., SSN requirement, FICO score)—finding alternate ways to get the information/assurances you need.

  • Harnessing technologies and trends such as ethical artificial intelligence or social media can help avoid exclusionary dependencies such as credit history, bank account, or physical proximity. It is important to note that algorithms underpinning these technologies are often used irresponsibly to reinforce bias and power asymmetries. When deploying, be sure to be consciously inclusive and keep AI ethics as a priority. 

• Consider the channels which are best suited for different target markets, including emerging markets or historically underserved populations.

• Consider shifting to scaled business models (making a small amount from many people)—instead of/in addition to asset-based business models (percentage of account balance which inherently prioritizes the wealthy).

3. Prioritize education, confidence, and long-term success over speed and short-term gains.

• Ensure your team fully understands the current financial system barriers that exist before starting to build any product adoption strategy.

• Prioritize education of risks and best practices of new or complex products over the speed of adoption.

• Ensure that risks of new products or services are clearly communicated to end-users in accessible language, along with best practices to help them navigate it.

• Give each individual an idea of where to start, with a guideline or set of goals that will allow them to benefit from your product or service.

• Build awareness via the channels best suited for each user group.

• Provide alternate ways for all groups to utilize your products/services that account for differences in infrastructure (such as internet speed, mobile device technology, consistency of power, access to transit)

• Inclusively represent what successful adoption looks like for end-users, giving them the ability to see themselves achieving success.

  • Embrace the full range of family types 

  • Paint a range of aspirational pictures (e.g., alternatives to the traditional “retirement”)

4. Engage users in a way that seeks to close the financial inclusivity gap.

• Ensure your team fully understands the current financial system barriers that exist before starting to build any product engagement strategy.

• Ensure that you can identify, measure, and compare engagement by user group—including traditional target markets, emerging markets, or historically underserved populations.

• Create engagement cycles that intentionally engage and empower users proportionately to their level of historical disparity and exclusion.

• Set key metrics around closing financial inclusivity gaps for emerging markets or historically underserved groups.

• Seek to integrate continuous education and confidence-building into product engagement.

• Create engagement features that refute damaging conventional narratives around financial inclusivity (or the lack of it).

• Highlight, praise, and celebrate diverse populations of users.

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Background

Goals of these principles

Help people create a world in which inclusion is the foundation of developing and evaluating the success of financial products. We aim to do this by expanding the definition of financial inclusion to include intentional equitable outcomes across all dimensions of diversity. 

Financial services and technology-based businesses must address societal inequities by tailoring tools, opportunities, and access towards marginalized groups, to eliminate the gap that exists for these groups in financial health and well-being. We are providing a framework that can be adopted and implemented by product leaders and executives when designing and evaluating products through these principles.

Organizational Requirements

Culture (Does your company understand and prioritize representation of the diversity of their users across the company):

For a business to serve underrepresented users, the teams, companies, and individuals building these technologies must represent the diversity of the users and the intersectionality of their customers’ experiences, with deep knowledge of global/cultural lived realities.

• Ensure your company has been educated on the current financial system barriers that exist and how addressing those is intrinsic to your product vision and strategy.

• Create company performance milestones around equity, diversity, and inclusion that are carried as business objectives (vs. any one individual function or team goal).

• Identify inclusivity and diversity gaps across all levels of your business and deploy cascading, meaningful SMART goals (specific, measurable, achievable, relevant, and time-bound) per function and team to hit performance milestones.

Barriers to Inclusive Practices

The “financial system” has a history of bias and discrimination, which persists today. Low-income customers are not as profitable to financial institutions, so these institutions have little incentive to be inclusive unless motivated by social justice, chasing scale, or required by regulation. Systemic barriers include:

• Language. People can’t engage when their languages or dialects are unavailable, when there’s a lack of language accessibility or accommodations for a disability, and when literacy levels are low.

• Structural requirements. Globally, there is a range of requirements that present barriers to low-income, out-of-work, or immigrant communities. These include credit score requirement (US: FICO score), identification requirement (US: SSN or ITIN; globally, one billion people lack proof of identity), employment requirement (e.g., women who are not working or not married can’t open a bank account in certain places), a requirement of a male/spouse signature, account minimums, balance requirements. There are also pay gaps across race, caste, gender which present a barrier to financial wellness.

• Geographical/physical barriers. Many low-income areas, communities of color, and rural areas lack convenient access to retail banking. Known as “banking deserts,” these areas have had branches close due to relatively lower profitability in the neighborhoods, COVID, or other factors. In some countries, rural post offices play a role. Fintech solutions will have a key role to play in improving the availability and accessibility of financial services.

• High fees. Some banks are notorious for fees, which fall most often upon low-income and underbanked customers. Banks maintain account fees, overdraft fees, check fees, and more. Low-income communities are a target for predatory lending; payday lenders charge high interest to those without other options for credit. Other industries do this, too (such as utilities charging to turn the electricity back on after a missed payment). 

• Access to capital. Many communities face challenges in accessing capital due to asset-level requirements or bias in the credit requirements. This is true for credit cards, mortgages, business loans, and venture capital.

• International limitations. Cross-border money movement is often limited because financial institutions fear fraud/money laundering or haven’t invested effort into understanding the systems of other countries. The impact to customers is limited options, high fees, long timelines, poor receiver experience.

• Technology. As Fintechs and tech-enabled solutions become widely adopted, technology can become a barrier. Can technology architecture handle large-scale growth? Can large institutions keep up with the new technology, with high investments in current systems? As apps become more increasingly sophisticated, can they meet all customers' needs?   

People also have barriers based on their background or circumstances. For example:

• Digital access and digital fluency. Due to financial or geographical factors, many people lack digital access due to financial or geographical factors—lack of reliable internet access, high-cost data plans, inability to access services on low-tech phones, and slow download speeds. Others struggle with digital fluency, (for example: older people and cultural groups who lack experience in their communities.)

• Financial knowledge and confidence. Common gaps in knowledge/confidence include budgeting, interest, creditworthiness, investing, lack of knowledge about financial tools. When people lack knowledge or confidence, they aren’t equipped to make financial choices that will benefit them; they often remain in the cash economy while missing the gains of other opportunities.

• Trust in the financial system. People choose not to participate in the financial system due to a lack of trust, which has arisen from several current and historical factors. Distrust can be due to lack of representation in financial institutions, disproportionately high fees, fraud, and bias in financial practices. Banks have a history of bias and discrimination in the US and its territories, beginning from the early days after slavery to redlining and mortgage discrimination and up through the damage Black people experienced during the sub-prime mortgage crisis. 

• Lack of emergency savings. Almost 40% of American adults wouldn’t be able to readily cover a $400 emergency. Globally the numbers are likely more dire. An unexpected medical bill or car cost can knock people off their tenuous financial hold.

• Participation in the informal economy. From US gig workers to Kenyan subsistence entrepreneurs, those with job insecurity face challenges building their financial stability. Additional impacts include COVID-related job loss, termination without notice, lack of employer benefits and protections (e.g., pension, health insurance, disability insurance).

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