#Fintech’s #power is in the unbanked and unbankable

Katharine Budd, the chief executive and co-founder of Now Money, a Dubai-based fintech start-up, explains how fintech works.
This is a new financial services phenomenon. While nowadays you might be able to operate your bank account from a website or mobile app, but the systems behind these online user interfaces have barely changed since they were implemented in the 1970s. The international payment transfer system Swift still runs on the telephone systems. This means that no matter how nice the front-end website your account is on, the transactions displayed are still run off legacy systems, which can lead to legacy issues such as delays in processing transactions and potentially losing the transaction in the system altogether.
New start-ups are innovating where banks are stagnating and are cooperating with regulators and cybersecurity experts and developing new technology. These organisations have become know as “fintechs” and their purpose can range from offering customers alternative ways to bank, usually through mobile, to using advanced analytics to provide investment recommendations.
A good fintech example is Now Money. It started by looking at the problem of 26 million low-income people who, as reported by the World Bank, are excluded from the Arabian Gulf’s traditional banking system. It uses mobile technology to bypass the need for physical branches and provide the unbanked low-income customers with services such as remittances using low-cost, cutting-edge technology.
The poster child for fintech is probably M-Pesa, also a mobile phone money transfer service, which was launched in Kenya in 2007.