Fintech for financial health: A conversation with Sarah Willis of MetLife Foundation

We sat down with Sarah Willis, Director of Financial Health & Inclusion at MetLife Foundation, to discuss what makes fintech stand apart from other methods of driving financial inclusion. 

What prompted your team to help design and launch Inclusive Fintech 50?

We’re excited by the promise and potential for fintech to enable people to take control of their financial health, creating more stability and greater flexibility in their lives. That’s why we collaborate with organizations like MIX, and one particular method that we’ve had success with is hosting competitions that identify and support innovative ventures with impact potential. Inclusive Fintech 50 was an opportunity to partner with other leading institutions – Visa, Accion, and IFC – to identify and elevate inclusive fintechs with impact potential to drive financial health outcomes.

We are confident that this effort will create visibility into a pipeline of inclusive fintechs that are reducing costs, improving the customer experience, and creating an environment where low- to moderate-income people and families can build resilience and short-term savings, expand their economic opportunities, and plan for the future. We’re excited by the level of interest of applicants globally – as the applicants point to a large pool of fintechs with products that can actually move the needle on some major financial health challenges.

There are many different methods used to further financial inclusion. What makes fintech so promising?

Fintech is no longer confined to Silicon Valley or within corporate innovation units. With its ubiquity, fintech has been proven to reduce costs, improve the scale and speed at which we reach low-income customers, and most importantly, it has become easier for consumers to better manage their financial lives in one place to achieve multiple outcomes – like setting aside emergency savings while paying down debt. Few people want to sit down and think about their budget, especially if ends do not meet. AI, automation, behaviorally-informed design, and FUN are all key ingredients in the quest to build sustainable solutions that improve financial health.

 

How can investors and founders ensure that a fintech is creating real and positive impact for low-income people?

When considering the potential impact of a fintech, we ask ourselves what a low-income person can achieve through the product or service. Technology can be distracting and the “Pain of Paying” research shows that people who pay with cash spend less than those who use credit cards of even debit cards. So, the same promising features of fintech that I mention before – speed and convenience, need to be met with a deep understanding of the needs, experiences, and realities of a low-income client. For example, smartphone penetration is in the single digits in some countries while feature phones are much more common. Or, 3-4-5G networks may turn into “no-G” networks the second you step outside of an urban center. So, fintechs could focus on delivering a product that customers can easily access instead of creating the flashiest app. Some of the simplest products can have transformational impact because they address significant pain points – think about low-fee remittances services or digital wallets that can be categorized by saving purpose. The innovations we are interested in elevating are the ones that improve people’s ability to manage day-to-day expenses, save for the short- and long-term, and prepare for unexpected expenses.

 

How else is MetLife Foundation advancing the value of financial technology for financial health?

We’ve formed several partnerships that advance efforts using fintech to improve people’s ability to build financial health. With Village Capital, the early-stage venture capital firm, and PayPal’s Social Impact team, we are supporting inclusive fintechs in the United States, Latin America, and Europe, the Middle East, and Africa through mentorship and seed capital.

We also believe in the power of understanding human behavior and designing products, services, and interventions that help people spend less, and save more. That’s why we founded and continue to support Common Cents Lab, a behavioral research lab out of Duke University that ensures product development is informed by behavioral design, and addresses the cognitive biases that lead many of us to act irrationally.

Lastly, nodding to the entire ‘ecosystem’ of players in fintech, we support nLIFT (Nonprofit Leaders in Financial Technology), a group of mission-driven organizations across the United States that are committed to using fintech to deliver meaningful outcomes for the people they serve. They have deep insights on how to serve low-income customers, and are working together to create a more inclusive financial system that works for everyone. 

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Inclusive Fintech 50 is funded by MetLife Foundation and Visa, with support from Accion and IFC. Winners will be announced on June 17. Sign up below for our email newsletter to stay updated.

Nikhil Gehani