Better Fintech Education Needed to Encourage Financial Inclusion

Dmitri Dawkins, commercial director for Phoenix International, a division of MC Systems, wants the financial industry to better educate consumers about the benefits of fintech to build trust and encourage participation in the formal financial system.

Mr Dawkins said while Jamaica has “fantastic technology available” especially with the automated teller machines (ATMs) and other fintech payment solutions, the major challenge that has prevented a greater take up of these services has been the distrust of technology and the institutions.

“For many of us within financial institutions and technology companies, our customers are trusting us by default and not by choice. Dane Nicholson spoke about the adoption of tap payments and the fact that no-one had previously questioned cards with magnetic strips before,” he argued.

He continued: “Now that something new (tap) is being introduced, they say ‘wait hold on, I don’t trust this thing’, ‘I don’t want to use it’ when really and truly the new technology is more secure, more convenient and better overall. This is an example why we need educate and make sure that people not only just trust by default, but also choose to use things because it improves their lives on a daily basis.”

Mr Dawkins was a presenter at the 12th Annual Anti-Fraud Seminar on Thursday, July 13. The event was hosted by the Jamaica Bankers’ Association (JBA) Anti-fraud Committee in partnership with the Jamaica Institute of Financial Services. The seminar was held under the theme: “Combatting Fraud: Remaining Vigilant” at the Terra Nova All Suite Hotel, in Kingston.

The commercial director said here in the Caribbean, colonialism destroyed the trust between the consumer and financial institutions which has caused high levels of financial exclusion. He argued that many financial institutions have failed to develop strategies to address these longstanding issues and improve customer satisfaction and financial inclusion.

“Colonialism created an environment where there was distrust in the first place and this is why we have high amounts of financial exclusion within our society where there are issues of racism, classism and long-term social distrust that need to be addressed. There are also the operational risks that we face on a day-to-day basis in terms of the Anti-Money Laundering and Know Your Customer requirements. We also have to deal with the economic risks such as historically high inflation and volatile foreign exchange rates; all of these things are major factors that we exclude from our strategies and from our consideration when thinking about our customers,” he stated. Mr. Dawkins also cited the need for more human centered design in strategy and product development.

“There are still so many families who for multiple generations don’t have a bank account because their parents said ‘those things are for a certain group of people, it’s not for us. It’s for the rich man’. They also say we don’t invest because we don’t earn enough money etcetera, when really and truly they can access many of these opportunities now – with our current tiered KYC regulations- with just one form of identification,” he added.

Mr Dawkins affirmed that although the economy supports digital payments, there were a high number of Jamaicans who are still unbanked and underbanked as opposed to those who were highly banked. He explained that those who are highly banked are those who were a part of the financial system and called for more to be done to include Jamaicans from all social backgrounds.

“If you just step outside right now and look you’ll see it in just the vehicles that people drive in terms of those who may be able to access a loan and those who can’t. Somebody will have a brand new vehicle versus somebody who has a 30-year-old vehicle,” he explained.

“This may not be that the person with a brand-new vehicle can better afford it. It’s just that the person with a brand-new vehicle qualified for a loan, and the other person doesn’t have enough financial history for them to qualify for the loan,” he added.

He emphasised that more can be done to include more Jamaicans in the financial ecosystem.

“One of the major achievements I think that we made was actually implementing digital payments for the Jamaica Urban Transit Company buses where it became much easier to pay, in that people topped up periodically and were able to access services over and over without having to worry about stopping to get cash or if they have the right change,” he affirmed.

“You don’t think about these things, but it’s these micro transactions on a day-to-day basis that increases trust in technology and increases convenience  to achieve the behavior change that we want to see in society when it comes to financial inclusion and take up of fintech products,” he opined.