Making the world a better place with fintech research

Abstract

Financial technology (fintech) is seen as possessing significant potential to provide the poor access to financial services and help them escape the clutches of poverty. Surprisingly, Information Systems (IS) research has engaged little with fintech's promise of fostering financial inclusion for the poor. In the spirit of 'making a better world with ICTs', conducting 'responsible IS research for a better world' and 'understanding and tackling societal grand challenges through management research', we advance a framework for guiding IS research on fintech-led financial inclusion. Drawing on the IS literature and Information and Communication Technologies for Development (ICT4D) scholarship, we extrapolate five areas of research that can better illuminate fintech's contributions to financial inclusion: (a) business strategies for fintech-led financial inclusion; (b) digital artifacts of fintech-led financial inclusion; (c) business environment of fintech-led financial inclusion; (d) microfoundations of fintech for financial inclusion; (e) developmental impacts of fintech. We conclude with a discussion of how the five areas offer opportunities for impactful research on fintech and the promise of building a financially inclusive society.

FinTech ecosystem practices shaping financial inclusion: the case of mobile money in Ghana

“…During this process, we engaged with existing theory, concepts and content categorisation schemes (Urquhart, 2016). This led to concepts and theories on innovation ecosystems, financial inclusion and ICT for development (e.g., Karanasios & Slavova, 2019;Lagna & Ravishankar, 2021). The research process transitioned from pure inductive to integrating and building concepts from the literature.…”

“…FinTech innovations, such as mobile money, operate in an ecosystem of heterogenous actors that compete and cooperate to achieve a common goal (Lagna & Ravishankar, 2021;Lee & Shin, 2018;Muthukannan et al, 2020). Innovation ecosystems typically have one, or several, focal entities that help to define boundaries and coordinate between autonomous organisations (Jacobides et al, 2018;Senyo et al, 2019).…”

“…In a FinTech ecosystem, new and old actors combine to offer unique capabilities that complement one another and contribute to innovation (Lagna & Ravishankar, 2021;Lee & Shin, 2018;Muthukannan et al, 2020). Lee and Shin (2018) identify five interacting actors in the FinTech ecosystem: FinTech firms, offering technology mediated payments, wealth management, lending, crowdfunding, capital market and insurance services; technology developers such as big data analytics, cloud computing, blockchain and social media developers creating digital solutions; government actors including financial regulators and legislature creating a stable regulatory environment; financial customers, who use and benefit from the services; and traditional financial institutions such as large commercial banks acting as the trusted custodians of money.…”

“…Banks act as custodians of eFunds transacted on mobile money . By identifying this symbiotic relationship between actors we address how FinTech firms deliver pro-poor financial services (Lagna & Ravishankar, 2021). For instance, previously, the unbanked could not access small loans from traditional banks because of documentary and collateral requirements and inaccessible bank branches.…”

“…In turn, at the micro level, legitimising and sustaining practices are embodied in the activities of agents and merchants who offer supporting services for FinTech innovations. This is important in explaining the sustainability of mobile money services for the unbanked (Lagna & Ravishankar, 2021). While agents act as intermediaries between users and telcos, merchants accept mobile money payment for goods and services .…”