November 19

Michael Fryar

The Future of Fintech is Now: Takeaways from Harvard’s Rethinking Financial Inclusion 2018

Imagine a world where blockchain allows migrants to securely and instantly send money home without any transfer fees. Or consider the possibilities if artificial intelligence algorithms capable of analyzing satellite imagery could enable smallholder farmers to get non-predatory loans without the need for a credit score. If these visions excite you, you’re not alone – they were key topics of discussion amongst a group of leaders in financial inclusion from around the world at the latest Rethinking Financial Inclusion program at Harvard Kennedy School in October.

Rethinking Financial Inclusion is an executive program presented by Evidence for Policy Design (EPoD) in collaboration with Harvard Kennedy School Executive Education. It combines data and an evidence-based problem solving approach to explore frontier issues in finance for individuals who are underserved. Every year since 2014, the program has brought a broad range of leaders from the global financial inclusion space to Cambridge, Massachusetts for an intensive, immersive week of wrestling with the challenges of designing innovative financial products and policies that meet the needs of underserved customers – while also ensuring the sustainability of financial providers.

In my role as a Training Analytics Associate at EPoD, I have helped plan and execute the last three of these programs. This has given me a chance to see how the conversation in financial inclusion has evolved over time. More than in any previous year, the 2018 program featured a lot of buzz about blockchain and artificial intelligence.

One of the liveliest question-and-answer sessions of the course followed a presentation by Harpreet Singh, founder of startups Experfy and Expercoin. Singh emphasized that blockchain and artificial intelligence are not technologies of the future, but ones that have already begun to disrupt incumbent players. Instant remittances in any currency are now possible through blockchain companies such as Ripple, and smallholder farmers are starting to receive non-traditional credit scores powered by artificial intelligence thanks to startups like Harvesting.

An interesting side note to this is that big data, which is fueling the scale-up of both blockchain and artificial intelligence, now seems to be taken for granted in a way that it wasn’t even two years ago. In 2016, we devoted an entire panel discussion to big data and its implications for financial inclusion. In 2018, when Asim Khwaja, Co-Chair of the course and Co-Director of EPoD, mentioned that more than 2.5 quintillion bytes of data are now created every day, the practitioners and policymakers in attendance didn’t blink. The excitement among leaders now is not about the proliferation of data, but instead about the technologies that enable value to be extracted from that data.

Although blockchain and artificial intelligence have generated significant excitement, to truly deepen inclusion they must overcome a number of challenges. For example, there has been much discussion of the challenge of designing adequate regulation that addresses privacy concerns and ethical considerations. However, an equally important challenge is tailoring these technologies to customers’ needs and capabilities. Wajiha Ahmed, Director of Customer Insights for BFA, a global consulting firm specializing in financial inclusion, highlighted this in a session on “Technology in Financial Inclusion.” When introducing new technologies, Ahmed said, it is important to do so in a gradual and customer-focused way. “Consider the customer’s journey, and the touch points along the way where they interact with the provider,” she said. “Which of those should be digital and which human?”

Ahmed discussed the example of WorldCover, a crop insurance provider in Ghana that services smallholder farmers and is supported by the Catalyst Fund run by BFA. WorldCover faced a rural user base with only 50 percent mobile phone ownership and 20 percent literacy rates. To communicate with and retain clients, the company tailored a set of communication approaches for different groups: text messages for customers who had phones and were literate in English and French, and recorded messages for customers who spoke only local languages. For illiterate users without phones, the company organized meetings where local leaders broadcast voice messages on a speakerphone. It was important, in Ahmed’s words, “to build the digital ecosystem, step by step, with the customer in mind.”

This and other insights point to a key takeaway from the week, which is the need to stay focused on problems rather than solutions. This may sound counterintuitive at first, but it is at the heart of the Smart Policy Design and Implementation process, which participants followed in trying to solve problems facing their own organizations throughout the week. Whenever an exciting potential solution comes around, it is all too easy to treat it like a shiny new hammer and start to view all your problems as nails. This was true of big data and is now true of blockchain and artificial intelligence. Staying focused on diagnosing and understanding the root causes of your problems guards against this tendency, and ensures that the solutions you do eventually come up with are appropriate for your specific context.

It is important to note that solutions are never final, since they are subject to continuous testing and refinement. This leaves open the possibility that new technologies can be added in during future iterations – but only if they address the root causes of a new problem. In other words, your shiny new hammer doesn’t have to grow rusty in your toolbox: just make sure you only pull it out when you encounter a nail.


Michael Fryar is a Training Analytics Associate at Evidence for Policy Design where he focuses on training policy decision-makers to effectively apply data and evidence in their work.


Photo by Panumas Nikhomkhai via Pexels




Finance, Technology
artificial intelligence, blockchain, financial inclusion, fintech, research