An emerging industry of financial services technology startups, known as FinTech, is creating a new wave of products for financially underserved customers, according to research issued today by the Center for Financial Services Innovation (CFSI) and Core Innovation Capital.
The “underbanked” market in the United States is estimated at $78 billion in annual revenue, serving 68 million consumers across 22 different financial product types, the announcement says.
The new report Financial Technology Trends in the Underbanked Market, which benefits from strategic input and financial support from Morgan Stanley, highlights recent innovations in mobile technology, computing power and data availability that are driving the development of high-quality products and services for underbanked consumers.
“The emerging trends detailed in this research represent tremendous potential for the financial services industry to engage more fully with underserved consumers in value-driven ways,” said Rob Levy, Director, Research, CFSI. “Our goal is to provide guidance and leadership as entrepreneurs and innovators begin to capitalize on new technology and develop relevant, sustainable and scalable strategies for meeting consumer needs.”
The report identifies four key trends impacting the underbanked market: harnessing social networks, solving the cash in/out problem, leveraging big data for better risk management, and scaling up by going B2B2C.
Each of these trends is analyzed in the context of five FinTech industry factors relevant to growth and profit potential, such as the regulatory environment and consumer behavior trends. The report also highlights companies leveraging these trends for the underbanked market, including a specific company case study for each trend.
“The growing number and sophistication of companies point to the incredible opportunity presented by the underbanked market,” said Arjan Schütte, managing partner of Core Innovation Capital. “Serving this Emerging Middle Class well and responsibly can lead to incredible financial growth and expansion opportunities. In partnership with CFSI and Morgan Stanley, we are excited to help call attention to this market, the trends driving it forward, and the companies that best serve it.”
This year, Morgan Stanley made it onto CoreBrand’s Top 100 BrandPower Rankings, which provide a market-view evaluation of corporate brand strength regardless of industry affiliation.
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Founder, Hower Impact
Mike Hower is the founder of Hower Impact — a boutique consultancy delivering strategic communication advisory and support for corporate sustainability, ESG and climate tech.
Published May 9, 2013 2am EDT / 11pm PDT / 7am BST / 8am CEST