We deserve a more equitable economy, and if the current crop of mission-based fintech innovators have their way, we’ll get one. Achieving this goal requires approaching long-standing economic problems in novel ways—including through the use of digital tools that empower underrepresented groups and create new opportunities to build wealth.
“As we innovate, and as we’re establishing the building blocks of the digital economy, we must do so with inclusion at its core,” says Michael Froman, vice chairman and president of strategic growth at Mastercard. “Innovation for inclusion starts with understanding the needs of those who risk being left out, and those who’ve been traditionally left behind.”
At the recent Fast Company Innovation Festival, Mastercard hosted “Faces of an Inclusive Economy,” a virtual panel discussion with two innovators who are paving the way for a global economy that serves everyone. They discussed the barriers to economic inclusion, reasons for hope, and the ways digital technology may allow us to break through them. Here are five takeaways from the event.
1. Build owners and investors, not just consumers.
In a capitalist system, the path to economic empowerment is through investment and ownership, says Tanya Van Court, CEO and founder of Goalsetter, a platform that helps parents teach kids financial literacy. Yet the wealth gap for African Americans and Latinos continues to grow. “By 2053, African Americans are projected to have a negative net worth, and Latinos are only 20 years behind,” she says.
The problem is these communities are not given the financial education and tools they need to successfully build wealth. “We’re teaching some folks how to be financially successful, letting them be the owners and the investors,” she says. “And we’re teaching other folks how to be the consumers that support the economy that everyone else gets rich on.”
Through the Goalsetter app, Van Court hopes to narrow racial wealth gaps in the U.S. by teaching children and their parents how to use budgeting, saving, and eventually investing to build long-term wealth.
2. Economic infrastructure is a must.
One fundamental barrier to economic inclusion is a lack of infrastructure. “According to the World Bank, 72% of the African population does not have access to any financial services,” says Ralph Pecker, CEO of Paycode. These barriers create systemic inequality that has consequences beyond economic participation. For example, a lack of government identification has made it difficult to vaccinate the rural population in many African nations.
Paycode’s solution is to give unbanked, rural communities in Africa and elsewhere access to secure biometric payment cards that can run transactions in real time with no internet connectivity, while also providing a form of digital identification. Technology like this, Pecker says, can bridge the gap between financial institutions and governments and unbanked citizens, giving people easier access to cash, mobile money, microloans, insurance, pensions, and social benefits.
3. Creating trust is essential to introducing new tools.
Rural communities that aren’t used to digital technologies may be intimidated at first. Pecker experienced this firsthand collecting biometric data for Paycode. “A lot of people, when you ask them to take a fingerprint, photograph, or some sort of identification authentication tool, immediately get a little bit worried,” he says. “And so you’ve got to slowly build the trust.”
Building trust is equally important in helping persuade underserved communities in the U.S. to adopt new tools that can help them build generational wealth. “It is time to address the needs of communities with people who come from those communities, with people who understand the problems with those communities, the language of those communities, how those communities want to engage, and how they want to be spoken to,” Van Court says.
4. Racial justice protests have mobilized investors.
When Van Court first brought Goalsetter to the attention of venture capitalists six years ago, she was met with skepticism. But the racial justice protests sparked by the murder of George Floyd in 2020 changed the national conversation about equality. “It was the first time in a long time that America has woken up and said, ‘Wow, things are fundamentally and patently unfair,‘ “ she says. Investors took more interest in businesses designed to counter long-standing inequity, and today Van Court is finding more and more venture capitalists who see the urgency in Goalsetter’s mission.
5. Closing the wealth gap will take a collective effort.
No singular organization will fix the persistent problem of economic inequality. Instead, it’s up to governments, businesses, and individuals to do what they can to close the wealth gap in the U.S. and around the globe. Take Paycode, which currently serves 5.5 million people in eight different countries. Pecker says he would like to bring the service to 100 million people before he retires. “I can’t change the lives of 700 million who are underserved and underbanked,” he says. “But if I can make a small dent—and if everybody can see what I’m doing and follow suit—I think we’ll create a better environment for the world and close the gap between the rich and the poor.”
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