DRIVING FINANCIAL INCLUSION: THE ROLE OF FINTECH IN SHAPING CONSUMER BEHAVIOR IN A CASHLESS ECONOMY

Movement towards a cashless economy is essentially remodelling the global finance scene and fintech services are playing a key role in moving towards a cashless economy. By implementing novel ways of solving problems though technological means, fintech has changed the existing financial systems by providing open, convenient, and transparent solutions that fit the needs of consumers and businesses. Some of the forms of technologies, which have become fundamental towards the redefining of how individuals interact with money, engage in transactions, and the decision-making capabilities are mobile banking, digital wallet system and peer to peer lending platform. Through its digital innovations the fintech has created vast opportunities to provide financial services especially to the population of emerging economies and underserved communities who were not covered by the traditional financial systems. This chapter will discuss how multifaceted the use of the fintech has affected the decision-making and behaviour of consumers. Implementation of such tools as mobile banking and digital wallets has allowed consumers to experience smooth transactions, track their streams of income in real-time and improve their budget planning skills, respectively. The fact that people can make more informed
decisions has also been enabled by Fintech capability of offering financial solutions by utilizing highly progressive technologies like artificial intelligence (AI) and machine learning. An example here is that robo-advisors provide individual investment advice based on the level of user-entered risk and the digital lending models evaluate credit worthiness based on alternative data to offer credit to those that may have no formal financial data. Financial literacy and its awareness have not only been enhanced by these developments, but have also given consumers more confidence on how they handle their finance well being.