Technology can help democratize financial services – California News Times

The author is a professor of economics at Imperial College London

The economic effects of the epidemic have been partially obscured by unprecedented support from governments around the world. In September, many epidemics will begin in the United States and the United Kingdom. This is the worst case scenario for low-income and low-income households. Wealth inequality, which was a major concern before the outbreak, is now even worse.

Over the past few decades we have seen growth all over the world. Poverty-stricken leader, partly because we can save more. However, high returns of risky investments, such as stocks and homes, also benefit rich people who have access to risky financial markets and borrow at unprecedented interest rates. They brought it.

The special access to wealth of the rich is a permanent feature of globalization. Losses for poor families can be significant. In India, for example, the next best financial plan is estimated at 10% of the average annual income of a typical middle-class household.

One of the obvious problems is that the constant costs of providing financial services have increased small investments and loans. Many financial products have stable income and expenditure flows and do not meet the needs of poor households with variable cash flows. Poor people often lack the social networks and special education needed to learn about lucrative investment opportunities. We also do not have time to protect ourselves from financial institutions that take advantage of their weaknesses.

The good news is that we now have a unique opportunity to make a difference. The epidemic is looking for ways to make the damaged economy more productive and to release entrepreneurs who have been imprisoned for more than a year. Technology is the only way to communicate with others in this difficult time, and as a result, you know the tools that lower the cost of basic financial services. And perhaps most of all, there is widespread recognition that social stability is at risk in all aspects of wealth, race and gender.

What can you do to increase access to high-quality financial management at an affordable price? Family events reflect the economic diversity of their economy, so financial products need to be customized. The challenge is to provide affordable housing for the low-income families. Technology is an important part of the solution because it can handle small transactions cheaply and respond to changes such as revenue.

However, there are limitations to the technical distribution of the gospel. Building a healthy family financial system eliminates exploitation, such as lending algorithms, that increase small-scale discrimination and smartphone transactions that encourage small investors to buy high-value mem shares. Technology must be monitored to drive innovation when it comes to action.

Considering these warnings, there are ways to improve the lives of millions of people by providing affordable access to customized financial products. For example, the establishment of national postal services reduced costs and opened up new opportunities for small businesses in the 19th century. Similarly, well-controlled technology can increase access to financial services in the 21st century.

John Campbell, a professor of economics at Harvard University, contributed to this article