Understanding the impact of inclusion in Fintech
Date
2024-05
Authors
Frederick, Miranda Jo
Major Professor
Advisor
Lee, Jeong Eun
Bartholomae, Suzanne
Fox, Jonathan
Committee Member
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Altmetrics
Abstract
Financial technology ("Fintech") is uniquely positioned as a substitute for traditional banking and a complementary tool. This dual capacity grows its reach to those with existing bank accounts, extends financial services to marginalized groups, and broadens the customer base beyond banking customers alone. Evidence of widespread use in groups who have traditionally been excluded from the financial system supports that Fintech may be improving financial access; however, it is unclear if the benefit of Fintech use is enough to improve the financial well-being of marginalized groups.
Using data from the 2021 National Financial Capability Survey, this study aims to understand the relationship between race, Fintech use and financial well-being of Hispanic and African American consumers in the United States. To understand more about how use compares across race, usage rate of five Fintech product categories was analyzed. Results demonstrated African Americans and Hispanics rated highest in use for all five categories, suggesting a growth in use by these groups as identified in previous literature. A regression analysis was completed to understand how the association between Fintech usage and financial well-being differs by race, while controlling for sociodemographic covariates. Results suggest Fintech plays largely different roles for minorities versus Whites in the United States, providing evidence that Fintech
companies hold a unique responsibility and opportunity to support the financial well-being of their largest user groups.
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