The FinTech Chemist: Giving Thanks for FinTech

Studying the properties and composition that make up the FinTech ecosystem

Welcome to this week’s industry analysis with the FinTech Chemist. The majority of us here in the US are gearing up for the holiday season. Whether you’re traveling to see loved ones, or hunkering down with the family for a few days, Thanksgiving is a time for reflection. So, while you’re in a tryptophan coma from all the turkey (I, for one, will definitely be on the couch in sweatpants), take a moment to say thank you and express gratitude. While FinTech might not be top of mind this week, the industry has certainly given us a lot to be thankful for, as it continues to make our lives easier. “FinTurkey” may not be a thing anytime soon, but here are a few aspects of FinTech that I’m thankful for this year:

Physical Wellness

I wish I could be one of those people to wake up early and run a 5k Turkey Trot on Thanksgiving, but I can certainly appreciate how FinTech is taking notice of people’s physical activity. FinTech has become more intertwined with insurance and healthcare, and it’s driving true innovation in the space. For example, AMEX just recently announced a partnership with British life & health insurance company Vitality. In a press release, AMEX stated, “The Vitality American Express® Credit Card, which is now available, has no annual card fee and is open for applications from existing Vitality members with eligible policies. The card has a unique health and well-being focus, with the total amount of cashback available to members dependant on how physically active they are in any given month.” To obtain points, members can track their physical activity on an approved device that can be synced to the Vitality app. Points can be gained for things like taking 7,000 steps a day, completing a run, or going to the gym. The higher the level of activity, the higher the amount of cashback earned. After this indulgence from this week, sign me up! As access to information becomes easier than before, expect personalized programs and data tracking to become even more robust, moving into 2020 and beyond.

Tackling the Bigger Issues Like Climate Change

There’s a growing focus on investing, which incorporates environmental, social, and governance concerns, better known as ESG. While this may sound like an ingredient in your pumpkin pie, the increased awareness of ESG is actually linked to more environmentally conscious decision-making and a more ethical approach to capitalism. CyClean, a South Korea-based startup, is incentivizing users to help keep the planet green through cryptocurrency and fitness gear. The basic idea behind CyClean’s model is to measure and reward every user for the physical exercise they perform and the amount of toxic gas emission they prevent. For example, if you’re wearing CyClean’s wristband, you’ll receive tokens for every mile you walk or run. The indoor bicycle pays you with CyClean tokens for every mile you pedal. The reward is meant to encourage users to take care of their bodies, which CyClean considers a requisite to having a cleaner planet. Other companies are even tackling the issue on a global scale. Take VesBox, for instance. The London-based renewable energy FinTech company has launched an innovative software platform that measures (in real-time), the financial bankability and sustainability of renewable energy assets in over 80 countries globally. I’m hopeful this trend will continue, as it’s a global phenomenon that ultimately affects all of us. 

Making Shopping Safer

We’ve all heard or even witnessed horrific events around Black Friday shopping. No one needs to get trampled for a TV, nor is it the reason for the season. But, should you indulge in the great deals that happen this time of year, you can thank FinTech for enabling you to have access to everything from the comfort of your couch. Thanks to the rise of mobile phones, it’s easier than ever to shop, and digital-native businesses are capitalizing on the trend. Consider this: the last step to an online experience is the payment process. It’s also the most important, as it’s what finalizes the deal for both the customer and retailers. Apps and websites that sync well with mobile wallets are more successful in completing a sale from start to finish, with fewer consumers abandoning their cart out of frustration. Hey, that certainly beats getting your heels rammed by a shopping cart!

Financial Inclusion

After attending 20+ industry events this year, they all had one theme in common: How FinTech is bolstering financial inclusion. Now, this isn’t a light topic, and there are many layers to this sector of FinTech. It’s imperative to recognize its importance to the global economy. Financially underserved populations face dire consequences by not having access to credit, insurance, or bank accounts. Fortunately, many emerging markets like LATAM and Africa are challenging banks and FinTechs to step up and help. And boy, FinTechs have started answering the call. Take Leaf, for example. Leaf helps refugees in Rwanda safely transfer their assets across borders and in multiple currencies, using blockchain technology that minimizes the attention of thieves. The Medium reported, “Banco Mare in Brazil reaches excluded communities in Rio de Janeiro’s largest favela via a blockchain-based digital platform. About 11 million people in Brazil live in favelas and are currently overlooked or under-served by traditional financial service providers.” Another company to watch out for is Sokowatch. Informal, small merchants make up most of the economic activity in African countries, yet they face enormous challenges to grow. Sokowatch solves these problems by connecting East African informal retailers with fast-moving consumer goods manufacturers. The company is striving to create the largest e-commerce network of goods and services for informal retailers across emerging markets. Those are just a few examples of how FinTech is creating a more inclusive world.

As we near the end of 2019, take a few moments to reflect, eat until you can’t breathe, and, most importantly, give thanks. Now, onto my next scientific… I mean FinTech hypothesis adventure. And, as always, remember to take your vitamins!

Read the previous edition of The FinTech Chemist.