The Impact of Convergence on FinTech

"What do you mean 'convergence'? Many believe we're in the 'Era of Individuality'!" This was my thought at first when I dived into the future of technology and came across this concept, and for good reason. In today's digital age, all you need is an internet connection and an idea to take on the largest, most established company out there; in any field of business. The only challenge? It needs to be a radical, path-breaking idea.

However, the challenge faced by any radical idea tends to be the same: acceptability – or in other words – achieving a critical mass of users. This is especially true of Fintech - which deals with money; when it comes to their hard-earned money, people are always apprehensive. They prefer the more trusted alternative over the more innovative or convenient one.

FinTech is an amalgamation of the two polar opposites of industry specialists – Finance and Technology. It's rare to find a single person with the right mix of knowledge involving coding, finance, law, and marketing to pull off a FinTech start-up on their own. Even larger companies venturing into this space face difficulties. Banks which are trying to take on mobile wallet companies by launching their own wallets are having difficulty in adopting technology to create a product intuitive enough for their consumers.
It's rare to find a single person with the right mix of knowledge involving coding, finance, law and marketing to pull off a FinTech start-up on their own.

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The answer to this predicament is – convergence. Entities, both individuals, and organizations, from different industries, are coming together to re-define FinTech. Where banks failed, network carriers succeeded. Vodafone collaborated with Safaricom to launch a product called M-Pesa in Kenya and Tanzania. These countries had massive sections of their population which were unbanked. M-Pesa brought branch-less banking by allowing transfer and payments through pin-verified SMS systems. Now Kenya has more than 15m subscribers who transact as much as 60% of the country’s GDP over the mobile platform.

India also has large sections of the unbanked population. Half a decade ago, precisely, only 35% of the Indian populace, had bank accounts. One of the key moves by the Indian government to change this was to tie in LPG subsidy with bank accounts. By mandating that every individual had to create a bank account to avail this subsidy, the Government effectively boosted the banking population in a matter of 6 months. Today the bankable population in India stands at over 53% - and has a tremendous scope of betterment.
Half a decade ago, precisely, only 35% of the Indian populace, had bank accounts.

Financial inclusion does not end at opening bank accounts, it's just the starting point of a multi-layered process. The process of financial inclusion encompasses the technology, tools, products and the understanding to use them. When these come together to create value for an individual to navigate the complexities of life, we can celebrate the success of our efforts. How do we achieve that success?

At MetLife Foundation, we've invested time, resources and efforts to create a platform to aggressively drive financial Inclusion worldwide. We call this Inclusion Plus. We're inviting your solutions, and business models to come re-shape the world and help unleash the potential of India as a financially inclusive nation. This is our platform to give you the convergence needed to achieve this goal.
We've set out to change and empower a nation and we know this is no mean feat. We also know it's impossible to go at it ourselves.


This article was originally authored by Krishna Thacker, Director, MetLife Foundation