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Fintechs for good

Fintechs as a Force for Financial Well-Being

Collectively, fintechs make up one of the largest and fastest-growing market sectors in the world. According to one analyst, by 2022, the global fintech sector will be valued at $310 billion - more than double its 2018 value.   

This high-speed growth spurt can be attributed to a multitude of factors, but topping the list is the ability for the average fintech firm to quickly deliver on the need for innovative, user-friendly financial products and services. 

That’s because most fintechs are leaner than their mainstream financial industry counterparts, free of bureaucratic bloat that can bog down innovation. This agility enables them to quickly pivot to meet evolving consumer needs - especially when it comes to delivering products to enhance financial well-being. 

Anyone doubting this last boast should consult a recently-released, joint study by the World Bank, the Cambridge Centre for Alternative Finance at the University of Cambridge’s Judge Business School and World Economic Forum. Together, they examined the global economic fallout that followed the eruption COVID-19 and concluded it was fintechs that were most effective in helping those in need. 

According to one of the study’s authors, despite an array of unprecedented challenges, “[fintechs were] resilient and adaptable: contributing to pandemic relief efforts, adjusting operations and offerings to serve vulnerable market segments … while posting year-over-year growth across most regions.” 

Overall, the study found, “fintech innovations are helping reduce the cost of providing services, making it possible to reach more people, and reducing the need for face-to-face interactions, essential for keeping up economic activity during the pandemic.”

Learn how BillGO responded to COVID-19 with the launch of its award-winning bill-pay relief hub.

In a related story, earlier this year the Federal Reserve Bank of New York reached similar conclusions when it studied the SBA’s Paycheck Protection Program (PPP) lending program. According to their findings, underserved businesses - particularly black-owned businesses - were more successful obtaining PPP loans when they applied to fintech lenders “even though most … applicants had no existing relationship with [the fintechs].” 

The Fed’s findings were not without precedent. A separate, 2020 study determined fintechs “played an important role” in keeping many small businesses afloat following the 2008 financial crash.

Changing Financial Frameworks 

These are just a few examples.

Anyone seeking more should consult Digitizing Finance: Fintech As A Solution For Consumer Financial Health and Inclusion, a 2020 Harvard Kennedy School whitepaper. Jo Ann Barefoot, the paper’s author, devotes most of her 48-page study to charting a ten-year history of fintechs “changing financial frameworks” for the betterment of consumers and business owners.  

Throughout, she identifies a litany of common barriers preventing people from gaining financial traction. For nearly every barrier she mentions - technology gaps, financial illiteracy, unfair credit scoring, discriminatory lending practices, etc. - she calls out one or more fintechs aggressively tackling the problem.    

“There is no source of consumer and small business financial difficulty …,” she writes, “that is not being targeted by fintech innovation.” 

Financial Well-Being, Bill Pay and BillGO 

The source of financial difficulty BillGO targets is the need for consumers and business owners to have better methods of paying and managing their monthly bills and subscriptions. 

As we confirmed in our 2020 study, How Americans Pay Their Bills, most Americans live paycheck-to-paycheck. This means it’s common for people to find themselves scrambling to make ends meet as bills accumulate. This scramble is necessary because most consumers recognize just one late payment can negatively impact their credit score, which can ebb away at their overall financial well-being. 

BillGO helps by providing users with a secure, real-time bill pay platform to help ensure they can stay on top of bills, avoiding late fees and penalties. Our real-time bill payment solutions not only enable users to decide how and when they pay their bills, but it also gives them greater visibility into their bill pay picture, helping them budget more effectively. In other words, BillGO transforms the dreaded necessity of managing and paying bills into an opportunity for financial health. 

But our commitment to financial well-being goes beyond our solutions. BillGO recently joined the Financial Data and Technology Association (FDATA) of North America, an organization whose members work together to provide tens of millions of consumers in Canada, the United States and Mexico with aggregation-based tools to better manage their finances. Not only did BillGO join FDATA of North America, but Kimberly Hebb, BillGO’s Chief Risk Officer, recently joined the FDATA North America Policy Committee, enabling her to advocate on behalf of consumers and small businesses. 

For those consumers and business owners who are struggling to make ends meet, we want to remind you that last year BillGO launched the Bill Pay Relief Hub. This award-winning, interactive Hub showcases a variety of organizations across the U.S. that are offering deferred payments, loan forbearance, waived fees and other forms of assistance to those hit hardest in the post-pandemic economy.