- FEXD, a company formed to develop a global financial technology ecosystem, continues to develop a diverse portfolio of FinTech-related products and services to consumers and businesses in the United States, South Asia, East Asia, Africa, Europe, and Latin America
- The goal is to empower underserved populations by providing FinTech solutions that boost and shift purchasing power
- Fintech innovations affect various dimensions of financial services, including domestic payments, credit, remittances, savings, insurance, and investment management
- Access to credit and remittances have been shown to have positive effects on purchasing power
- On its part, FEXD aims to develop products that help consumers buy products and services from anywhere, make payments across borders, remit money to recipients in other countries, and send money to people in remote locations
As early as 2016 – and perhaps even earlier – the signs were emerging of the disruption that financial technology, or FinTech, was set to cause in the market. “FinTech is a dynamic segment at the intersection of the financial services and technology sectors where technology-focused startups and new market entrants innovate the products and services currently provided by the traditional financial services industry. As such, FinTech is gaining momentum and causing disruption to the traditional value chain… Cutting-edge FinTech companies and new market activities are redrawing the competitive landscape, blurring the lines that define players in the financial services sector,” wrote PwC in its 2016 Global Fintech Report (https://ibn.fm/JRcUH).
Years later, FinTech has remained resilient, helping consumers and businesses weather a series of storms that battered the global economy, from the global pandemic and the uncertainty that came thereafter to the rising inflation in 2022 (https://ibn.fm/5RIb5). This resilience stems from the fact that FinTech enabled – and continue to enable – consumers to access their finances from anywhere, receive money sent from anywhere, manage liquidity and payments, use the built-in saving tools to meet short- and long-term goals, and stay on top of their investment holdings (investment management) during both good and bad times. In addition, digital lending platforms have penetrated areas that may be underserved by traditional banks.
To put it simply, FinTech provides stability, accessibility, flexibility, and opportunities to vast swathes of the population, and companies such as Fintech Ecosystem Development (NASDAQ: FEXD), a company formed to develop a global financial technology ecosystem, are watching keenly.
Many dimensions of financial services are affected by fintech innovations, according to a report by the International Monetary Fund (https://ibn.fm/Hl0Mq). These include domestic payments, credit, remittances, savings, insurance, and investment management. According to the report, digital payments have been the most common instrument of financial inclusion and can be expected to accelerate well into the future. Factors such as convenience, safety, and cost favor this acceleration, given their transformational impact on the daily lives of the underprivileged.
And as scores of people continue making digital payments, a lending opportunity emerges. Transacting on digital platforms generates data that, combined with proprietary algorithms, can be used to establish consumers’ creditworthiness, forming the basis upon which digital platforms can provide largely unsecured loans. And while digital payments have long taken much of the FinTech organizations’ attention, many are now alive to the intensifying demand for digital loans and the need to serve the underserved, providing the much-needed capital.
FinTech organizations operate 24/7 and can help SMEs easily access finance outside business hours. And according to the World Bank, a strong positive relationship exists between access to finance and employment or job growth (https://ibn.fm/atDk5). By extension, such organizations can help increase the number of employed people in a country, translating to greater purchasing power. Similarly, just as higher wages boost personal purchasing power, so too does availability of credit for consumers (https://ibn.fm/2zwLU).
At the same time, the IMF report reads, “The potential for FinTech to support affordable cross-border payments – notably for remittance – is high… FinTech combined with strong digital identification and robust money laundering and terrorism finance [controls] could have a great potential in supporting more affordable and remotely accessible cross-border transactions such as remittances that have been an important support for families in low-income countries.”
Such remittances increase the purchasing power of households and are a source of foreign income for many developing countries. From the lens of their impact on livelihoods, the remittances may provide capital for entrepreneurial activities, finance the purchase of basic consumer goods, housing, and children’s education and healthcare (https://ibn.fm/6CEre).
The positive impacts of FinTech for both consumers and businesses have indeed piqued the interest of FEXD. The company plans to offer a diverse portfolio of FinTech-related products and services to consumers and businesses in the United States, South Asia, East Asia, Africa, Europe, and Latin America.
These products are intended to help consumers buy products and services from anywhere, make payments across borders, remit money to recipients in other countries, and send money to people in remote locations who may not have access to traditional banking services. Thus, given the role of money transfers in boosting recipients’ purchasing power, FinTech Ecosystem Development aims to empower underserved populations in various regions worldwide.
For more information, visit the company’s website at www.FintechEcoSys.com.
NOTE TO INVESTORS: The latest news and updates relating to FEXD are available in the company’s newsroom at https://ibn.fm/FEXD
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