The power of fintech: Reaching far corners
One of the huge benefits of modern technologies and initiatives such as mobile and cross-border payments, Open Banking, the internet of things (IoT) and faster communications is that they can help to democratize trade right across the world.
A business no longer needs to make a huge investment in infrastructure to take its great idea to market, just an internet connection that opens up access to an ecosystem of pay as you go apps and services.
It means that niche growers, farmers or product designers can offer their goods to potential consumers in multiple countries, without having to give precious profit margins away in order to go through a distributor.
One example is Nguyen Van Son who has a coffee farm, Son Pacamara, in Da Lat, Vietnam. He uses natural, organic processes that are sustainable for the environment, growing coffee alongside other vegetables and fruit plants. However, farming using these methods is relatively expensive and it was difficult to secure additional finance to invest in the future of the venture.
All this changed when Nguyen Van Son became a customer of Vietbank, which uses the Finastra open trade platform. Not only was Vietbank able to assess the viability of the coffee farm by analyzing data sets such as past crop yields and future weather patterns, but it offered financial advice and access to a potential network of customers.
Deliveries to countries as far away as the UK, the USA and Korea can be monitored by Nguyen Van Son and his customers in a wholly transparent supply chain.
Enabling community success
Meanwhile, in rural India, Finastra supports the Rang De Swabhimaan project, which provides doorstep digital financial literacy and credit to individuals and small businesses. The project runs ‘kendras’ or training centres where people can take a range of financial literacy courses, learning how to deposit and withdraw money, as well as apply for loans to grow their businesses.
Rang De says that the kendras are built with the vision of becoming the heart of rural communities, helping to unlock the talent and potential of those who found it difficult to access advice and finance in the past. Those who succeed become community champions and role models, setting positive examples for friends and family.
Innovation drives success
As platform banking, with its open application programming interfaces (APIs), is adopted worldwide, innovative developers are bringing new ideas to market that enable everyone to trade, no matter where they live and work.
There are already fantastic examples of innovation in action. They include apps that connect individual banana growers in Africa with retailers; an online platform that enables farmers to sell directly to restaurants in Bogotá, Colombia; and an agri e-commerce service in Indonesia that links farmers producing coconuts, chillies and potatoes to large commercial buyers.
But this is just the start. Thanks to open technology, we will continue to see huge disruption in traditional value chains, with the potential to reduce waste and meet customer demands for more sustainable products.
Discover more in the Redefining Finance series