Banking Fintech Insurtech

How banks and fintechs are partnering for financial inclusion

How banks and fintechs are partnering for financial inclusion. Photo by Nong Mars,
Written by Chris Skinner

How banks and insurance companies are partnering with fintech firms to provide more inclusiveness. Story by Chris Skinner.

I received an email the other day pointing my attention to a report from the Center for Financial Inclusion at Accion (CFI), a think tank that engages and challenges the industry to better serve, protect and empower for financial inclusion. I hadn’t heard of CFI before, but their website and content is interesting, especially their new report on how banks and insurance companies are partnering with fintech firms to provide more inclusiveness.

The report examines how partnerships between mainstream financial institutions and fintechs are expanding access to the formal financial economy for underserved segments of the global population, particularly in emerging markets. It incorporates insights from 24 in-depth interviews with people on the front line of this innovation, and highlights 14 partnerships focused on financial inclusion that we think exemplify best-case scenarios and good practice.

Contrary to the popular narrative, financial institutions view fintechs as partners in innovation, not threats to their core business. By offering better, less expensive and more innovative products, financial institutions can assert their continued relevance as customer-facing institutions with help from fintech partnerships.

Major findings

The best partnerships between financial institutions and fintechs are a win-win for both partners, as well as for financial inclusion. Mainstream financial institutions partner with fintechs to improve product offerings, increase efficiency and lower costs – goals with special relevance to low-income customers. By partnering with mainstream financial institutions, fintechs get to scale their technology and can access capital to grow. As a result of these partnerships, low-income customers who are left out of – or poorly served by – the financial sector have greater access to higher quality, more convenient and less expensive financial products and services.

To facilitate productive fintech partnerships, mainstream financial institutions are organising internally for innovation, strategically integrating systems and staff, and developing contractual agreements to ensure stability and success. Fintech partnerships enable legacy institutions to engage with and learn from new technology in low-risk, low-cost ways. They are also key to allowing incumbents to compete in a world where alternative players such as Facebook and Amazon are threatening the central role of financial institutions in the lives of customers. By offering better, less expensive and more innovative products, financial institutions can assert their continued relevance as customer-facing institutions.

One encouraging and somewhat unexpected finding is that the partnerships between financial institutions and fintechs represent a slow but pervasive financial industry shift toward customer-centricity. Better data management and use, new digital banking products, and greater customer engagement all enable better service for underserved customer segments.

Four key financial inclusion challenges are being addressed through financial institution-fintech partnerships:

  • Gaining access to new market segments
    • AXA is partnering with MicroEnsure to extend insurance to new customer segments in emerging markets.
    • Diamond Trust Bank and Kopo Kopo are partnering in Kenya and Uganda to serve retail merchants.
    • Mastercard, Gridnod Bank and Net1 are partnering to reach unbanked social grant recipients in South Africa.
    • Société Générale is partnering with TagPay to attract new customers with mobile-enabled banking products in Ivory Coast and Senegal.
  • Creating new offerings for existing customers
    • ICICI Bank is partnering with Stellar to build a blockchain-enabled payments network for its customers in India and abroad.
    • Stanbic Bank is partnering with DreamOval to offer a mobile payments platform for underbanked merchants in Ghana.
    • Santander is partnering with PayKey on a peer-to-peer payments platform integrated into messaging applications such as WhatsApp and Facebook Messenger.
  • Data collection, use and management
    • MicroBank is working with Entrepreneurial Finance Lab (EFL) to extend credit access to thin-file entrepreneurs in Spain.
    • A major bank in the Philippines is partnering with DemystData to expand credit products to thin-file customers.
    • Ujjivan is partnering with Artoo to reach underserved micro, small and medium enterprises in India.
  • Deepening customer engagement and product usage
    • BBVA Bancomer in Mexico and Bancolombia in Colombia are partnering (separately) with Juntos, utilising its automated SMS conversation service to increase customer engagement.
    • PNB MetLife is partnering with Imaginate to provide a virtual branch experience for insurance policy holders in India.
Download the report.

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– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Photo by Nong Mars,

About the author

Chris Skinner

Chris Skinner is an independent commentator on the financial markets through the Finanser, and chair of the European networking forum the Financial Services Club, which he founded in 2004. He is an author of numerous books covering everything from European regulations in banking through to the credit crisis, to the future of banking.

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