Financial Services and Innovation Need to Be Inclusive
Insight Though Canada boasts robust financial services and financial innovation capacity, the financial system is not fully inclusive. Here’s how DFI's helping.
The Digital Finance Institute (DFI) — a Canadian think tank for financial technology, artificial intelligence, and blockchain — was set up nearly six years ago to address gaps in the financial industry. Two of its key pillars of focus are financial inclusion and women in finance and technology.
“Many Canadians lack access to financial services, so we wanted to raise awareness of this problem and try to find solutions, as well as encourage more women to get involved in financial innovation,” says Ellis Odynn, Executive Director and Chief AI Officer of DFI.
Improving access to financial services
Indigenous communities, refugees, the elderly, and Canadians living under the poverty line are the most excluded groups in Canada’s financial system. The Digital Finance Institute’s research shows that some “Indigenous people don’t have adequate government-issued photo ID so they’re unable to open a bank account in cities. Some refugees have had to flee their homes without their ID and are denied access to the financial system because they can’t prove their identity” says Odynn. “It’s a problem we care deeply about because inclusion of banking services is a right. You can’t live without a bank account when most of our essential services are online and require bank accounts.”
With more bank branches closing as Canadians turn to smartphone banking, the elderly population who don’t have or use the technology is being left out, especially if they don’t live near a bank or ATM and lack access to transportation. Canada has one of the fastest aging populations and one of the most expensive internet services in the world, which impacts inclusion. Canadians living under the poverty line who can’t afford monthly banking or internet fees, might see expensive payday loans as their only accessible option.
Though technology and innovation were intended to help Canadians, “we’re seeing the same financial inclusion problem,” says Odynn. “A lot of the innovation focus of our fintech companies has been on finding new solutions to getting banking done easier and faster, with less focus on innovating for good and helping people who need assistance.”
To help address this issue, the Institute has partnered with Mastercard and the Mastercard Foundation to sponsor a session devoted entirely to addressing critical issues of financial inclusion at Canada’s National FinTech Conference in Toronto this August, with speakers coming from United Nations and the World Bank.
Encouraging women in fintech innovation ecosystem
In line with its inclusion mandate, the Institute is encouraging more women to enter the fintech innovation ecosystem. “We’re an Institute founded by women and we see first-hand that women have a minimal footprint within the fintech industry, so we work to highlight the issues of women who work in technology, finance or AI,” says Odynn.
A key challenge is that many women-run fintech organizations don’t get the funding they need to get off the ground. “Without that funding, they can’t succeed and get to the next level,” says Odynn. On the positive side, more women are co-founding fintech companies and becoming a significant part of the conversation on changing how financial services are run. “I think that’s a great step in the right direction,” says Odynn.
“A lot of the innovation focus of our fintech companies has been on finding new solutions to getting banking done easier and faster, with less focus on innovating for good and helping people who need assistance.”
– Ellis Odynn, DFI
To showcase the contributions women are making in the fintech field, the Institute recently created a list of the Top 50 women in fintech in Canada based on what makes these women or their roles innovative and how they are giving back to their communities. “The Institute published the first white paper on women in fintech five years ago and was a global trailblazer in starting the conversation about inclusion of women in fintech right here in Toronto,” says Odynn. “We are proud of our leadership role, and we are continuing our tradition with a FemTech Leader Award presented by Scotiabank at the institute’s FinTech & AI Awards gala event this year in Toronto.”
With future banks being technology based, having more women involved in fintech innovation will be critical to addressing some of the major financial issues within the sector. “It’s important to make sure that banking is inclusive — is made for everyone, especially as artificial intelligence becomes a greater part of banking. That’s when inclusion will be critical” says Odynn.