FinTech Innovation and Financial Inclusion
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Abstract
Financial technology can widen financial inclusion by lowering transaction costs, overcoming distance, using alternative data, and delivering services through mobile devices and digital platforms. This article examines how innovations in payments, mobile money, digital lending, savings, insurance, identity, and open finance influence access, usage, quality, and financial well-being. It argues that inclusion should not be measured by account ownership alone. A product is inclusive when underserved users can afford it, understand it, use it regularly, obtain redress, and improve their ability to transact, save, borrow, and manage risk. Evidence from mobile money shows important gains in consumption smoothing and poverty reduction, but digital finance can also create fraud, exclusion through biased data, over-indebtedness, privacy loss, and platform dependence. Effective policy therefore requires interoperable infrastructure, proportionate regulation, responsible product design, digital capability, strong consumer protection, and measurement of real outcomes.
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References
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