Fintech 3.0: A New Era Of Financial Inclusion

Guy Kurlandski, Executive Director at Liquidity Group writes about the new era of Fintech...

Fintech 3.0: A New Era Of Financial Inclusion

Guy Kurlandski, Executive Director at Liquidity Group writes about the new era of Fintech...

8 min read
November 29, 2023

Fintech has long been viewed negatively in certain circles. This is primarily because companies in the payments, money transfer and investing space are often seen as focused on the tech instead of the regulated activities in which they are participating. But I see that as changing.

If fintech 1.0 was about payments—think Stripe, Plaid, Paypal and the like—and fintech 2.0 was about blockchain, then I see fintech 3.0 as about inclusion. Banking has long been a tool for the wealthy to make more money. With fintech 3.0, I believe that we can move the tools from boardrooms to neighborhoods.

Money transfer tools, high-speed wires and new investment tools are dusting off the old ways and making them work for more people. The main driver of this fintech renaissance is artificial intelligence (AI) and machine learning.

Era Of Inclusion

I see fintech 3.0's emphasis on inclusion as marking a new era in the further integration of digital technology. With the goal of bridging the gap between underserved populations and financial solutions, leaders can focus on leveraging innovative solutions to tackle this challenge.

One of the primary manifestations of this evolution is the emergence of fintech start-ups like ZestFinance, a company run by former Google CIO Douglas Merrill. It is just one example of the rising number of fair and inclusive tools for mortgage lending competing in a wider field of AI-based loan companies. Another example is Pentaip, a company that also looks to utilize AI to help source loans equitably.

In an industry long plagued by redlining issues, namely the refusal to loan to people of color in certain areas, these kinds of AI-driven tools can help remove bias from the equation, focusing on the financial facts.

Meanwhile, on the customer service side, tools like Kasisto and are helping banks globally work with customers without running into language barriers and geographic limitations.

These types of generative tools aren’t just for chatting about bank balances, however. Thanks to new methods to silo financial data away from locally run language models, banks can use these tools to empower their representatives with up-to-date information about regulatory compliance, customer protocols and even internal financial data. In a world where institutional knowledge fluctuates wildly, having an AI that knows the business inside and out is vital.

Finally, on the know-your-customer (KYC) and security side, fintech 1.0 and 2.0 have birthed new tools that can tell who you are based on something as personal as your typing style. Companies like Hooyu or Veriff, for example, use blended technologies to tell if you are who you say you are, thereby turning our phones into Fort Knox.

The Need For Network Effects

Previous incarnations of the fintech universe were marred by a lack of adoption. While most ‌of us are fine using online payment tools and near-field payment solutions on our phones, when is the last time you’ve truly experienced a groundbreaking new fintech tool in the wild?

I believe that achieving network effects is crucial for the success of any fintech firm seeking to promote financial inclusion. According to an article by Lenovo, "network effects occur when the value of a product or service increases as more people use it, resulting in a positive feedback loop." In the context of financial inclusion, network effects can be harnessed to enhance the reach and impact of new solutions, ultimately bringing more underserved segments into the formal financial system.

To achieve network effects, fintech firms can look to leverage local influencers. This is obviously a new tactic regarding financial marketing, but I think it is one worth exploring. Local influencers can help create a ripple effect, encouraging others in the community to adopt these services.

By partnering with influencers, those in fintech can tap into their credibility and better reach ‌underserved segments. This is particularly impactful in communities where information spreads through word-of-mouth rather than traditional marketing channels.

I think fintech can specifically use influencers from a local, specific geographic area or market. This way, firms can gain access to niche and highly targeted audiences, allowing them to effectively communicate the benefits of their services to these specific segments.

The New Way Forward

New technologies have created a pathway to financial inclusion by increasing the usage of digital financial services in developing countries. While there is still work to be done in building access to the internet, technologies such as mobile phones have helped facilitate the adoption of digital financial services, allowing millions of previously unbanked individuals to access and use financial products and services.

However, there are persistent divides in access and usage of digital financial services among different populations, for example, along gender lines. Women in many developing countries face greater barriers (download required) in accessing and using these services due to factors such as limited access to mobile phones, lower levels of digital literacy and cultural barriers. Bridging this gender divide is crucial for achieving true financial inclusion.

When it comes to improving digital financial inclusion as a part of fintech 3.0, I have several recommendations. First, there is a need to invest in digital infrastructure, such as expanding network coverage and access to affordable internet services. Second, simplifying banking procedures and regulations can make it easier for individuals to open and operate digital financial accounts. Lastly, financial education can play a pivotal role in ensuring that individuals understand how to utilize digital financial services effectively and safely.

New technologies offer immense potential to overcome the barriers to financial inclusion in developing countries. However, addressing the gender divide, improving digital infrastructure, simplifying banking procedures and promoting financial education are crucial steps in realizing the full benefits of digital financial services for all populations.


Guy Kurlandski, Executive Director at Liquidity Group - Certainty is a Science. Scalable non-dilutive financing solutions for growth stage.

Thank you! Your submission has been received!