Many thanks to Morgan Stanley and the Center for Financial Services Innovations for hosting a fascinating conversation today! The insights in this report, along with those of the late 2012 market sizing report, are essential for any company targeting the US underbanked market, and valuable for those working in emerging markets as well.
The original press release can be found here: http://www.cfsinnovation.com/content/technology-startups-creating-new-wave-development-and-innovation-financially-underserved
Technology Startups Creating New Wave of Development and Innovation for Financially Underserved Customers
Research Identifies Social Media and Big Data as Key Innovations Improving Financial Access and Tools for the Underbanked
New York, NY – (May 7, 2013) – An emerging industry of financial services technology startups, known as FinTech, is creating a new wave of products for financially underserved customers, according to research issued today by the Center for Financial Services Innovation (CFSI) and Core Innovation Capital. The underbanked market in the United States is currently estimated at $78 billion in annual revenue, serving 68 million consumers across 22 different financial product types.
The new report Financial Technology Trends in the Underbanked Market, whichbenefits from strategic input and financial support from Morgan Stanley, highlights recent innovations in mobile technology, computing power, and data availability that are driving the development of high-quality products and services for underbanked consumers.
“The emerging trends detailed in this research represent tremendous potential for the financial services industry to engage more fully with underserved consumers in value-driven ways,” said Rob Levy, Director, Research, CFSI. “Our goal is to provide guidance and leadership as entrepreneurs and innovators begin to capitalize on new technology and develop relevant, sustainable, and scalable strategies for meeting consumer needs.”
The report identifies four key trends impacting the underbanked market: harnessing social networks, solving the cash in/out problem, leveraging big data for better risk management, and scaling up by going B2B2C. Each of these trends is analyzed in the context of five FinTech industry factors relevant to growth and profit potential, such as the regulatory environment and consumer behavior trends. The report also highlights companies leveraging these trends for the underbanked market, including a specific company case study for each trend.
“The growing number and sophistication of companies point to the incredible opportunity presented by the underbanked market,” said Arjan Schütte, managing partner of Core Innovation Capital. “Serving this Emerging Middle Class well and responsibly can lead to incredible financial growth and expansion opportunities. In partnership with CFSI and Morgan Stanley, we are excited to help call attention to this market, the trends driving it forward, and the companies that best serve it.”
“We are pleased to support this first-of-its-kind effort to identify the key trends that are driving investment opportunities to better serve the U.S. underbanked market,” said Audrey Choi, Managing Director and Head of Global Sustainable Finance at Morgan Stanley.
To view a copy of the report, please visit http://www.cfsinnovation.com/content/financial-technology-trends-underbanked-market, or contact CFSI or Core Innovation Capital directly.
The Center for Financial Services Innovation (CFSI) is the nation’s leading authority on financial services for underserved consumers. Through insights gained by producing original research; promoting cross-sector collaboration; advising organizations and companies by offering specialized consulting services; shaping public policy; and investing in nonprofit organizations and start-ups, CFSI delivers a deeply interconnected suite of services benefiting underserved consumers. Since 2004, CFSI has worked with leaders and innovators in the business, government and nonprofit sectors to transform the financial services landscape. For more on CFSI, go to www.cfsinnovation.com and follow on Twitter at@CFSInnovation
About Core Innovation Capital:
Core Innovation Capital is a leading investor in financial technologies serving the Emerging Middle Class, the 80 million Americans that generate over $1 trillion in annual income and spend more than $78 billion in fees and interest on financial services. Core partners with proven entrepreneurs and invests in disruptive financial technologies that measurably improve the lives of the Emerging Middle Class. The Core Impact Alignment investment thesis leverages social impact to create above-market financial return. For more information about Core Innovation Capital, visit http://www.corevc.com or follow @coreemc.
About Morgan Stanley:
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. For further information about Morgan Stanley, please visithttp://www.morganstanley.com.