Fintech, Racial Equity, and an Inclusive Financial System

Volume 15, Issue 2 | August 19, 2021

This issue of the Community Development Innovation Review examines the promise and pitfalls of financial technology, or fintech, for fostering racial equity and greater financial inclusion. Edited in partnership with the SF Fed’s Fintech Team and Aspen Institute’s Financial Security Program, this issue brings together a broad set of voices from people working in various roles—including in technology, community development, economic inclusion, regulation, and investment—to contextualize gaps in the financial system and consider ways to address them. The authors examine dimensions of the fintech ecosystem that promote and those that hinder equity and inclusion. The issue also highlights partnership and design approaches to deepen impact. Fintech leaders are well-positioned to enable greater access to the financial system and are also faced with the potential for deepening existing inequities. This issue provides a starting place to explore this tension.

Download the full issue (pdf, 2.72 mb)

Issue Editorial Team

Bina Patel Shrimali, Co-Editor

Rocio Sanchez-Moyano, Co-Editor

Kaitlin Asrow, Guest Issue Editor

Sean Creehan, Guest Issue Editor

Genevieve Melford, Guest Issue Editor

Tim Shaw, Guest Issue Editor

Mackenzie Wallace, Guest Issue Editor

Article Citation

Federal Reserve Bank of San Francisco. 2021. “Fintech, Racial Equity, and an Inclusive Financial System,” Federal Reserve Bank of San Francisco Community Development Innovation Review 2021-2. doi: 10.24148/cdir2021-02

Table of Contents

Foreword

Laura Choi, Federal Reserve Bank of San Francisco and Ida Rademacher, Aspen Institute

The Racialized Roots of Financial Exclusion

Rocio Sanchez-Moyano and Bina Patel Shrimali, Federal Reserve Bank of San Francisco

Why do racial differences in access to financial services persist despite existence of anti-discrimination and fair lending laws? This article describes the legacy of historical exclusion and current barriers to access.

Fundamentals of an Inclusive Financial System

Genevieve Melford, Tim Shaw, and Mack Wallace, Aspen Institute Financial Security Program

This article provides a vision for an inclusive financial system: what it entails, what it does, and the benefits it will bring, both widespread and reparative.

Regulation to Build a More Inclusive Financial System and Drive Financial Health

Sean Creehan and Kaitlin Asrow, Federal Reserve Bank of San Francisco

Regulators play an important role in the fintech ecosystem. This article explores the tensions involved in the regulation of financial technologies.

The Role of Public and Private Capital in Digital Infrastructure for Finance in the United States

Kabir Kumar and Tilman Ehrbeck, Flourish Ventures

Investments in digital infrastructure can facilitate innovation and financial inclusion.

Global Developments in Inclusive Financial Systems

Mayada El-Zoghbi, Center for Financial Inclusion

What can we learn about fintech and financial inclusion from other countries?

Americans Need a Digital Identity System, Stat!

Waldo Jaquith, State Software Collaborative, Georgetown University’s Beeck Center

A digital identity system has the potential to close gaps in access to financial services.

The Next Frontier: Expanding Credit Inclusion with New Data and Analytical Techniques

Kelly Thompson Cochran, FinRegLab

New types of data and analysis can promote financial inclusion, but care is needed to ensure new techniques do not amplify inequities.

How Can Regulation Facilitate Financial Inclusion in Fintech?

Carol Evans and Karen Pence, Federal Reserve Board of Governors

How has fintech changed the assumptions that underpin consumer protection regulations and where do we go from here?

The Tech-Enabled Social Safety Net: A Case Study of the EBT System

Julieta Cuéllar, Propel

A carefully-designed tech-enabled social safety net can improve experiences for people participating in government programs.

Why Mission-Minded Fintechs May Be the Key to Closing the Savings Gap

Leigh Phillips, SaverLife

Nonprofit fintechs are well-positioned to develop and distribute financial tools to the people who need them most.

CDFIs’ Mission-Driven Orientation Is Critical to Making Financial Technology Work for Deep South Communities

Pearl Wicks and Diane Standaert, Hope Enterprise Corporation/Hope Credit Union/Hope Policy Institute

How can financial services technology be improved by leveraging the experiences of CDFIs serving historically underserved communities?

CDFI and Fintech Partnerships: A Promising Avenue for Affordable, Fast, and Equitably Distributed Small-Business Capital

Gwendy Brown and Luz Urratia, Accion Opportunity Fund

CDFIs and fintech can leverage each sector’s unique expertise for greater impact. This article shares key lessons for successful partnership.

Designing for Whom? Lessons from a Coordinated Relief Effort to Reach Student Loan Borrowers Most in Need

Maria Lajewski and Nataly Sabharwal, Financial Health Network

The development of two interventions focused on vulnerable student loan borrowers during the height of the pandemic provide key design lessons.