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Improving Financial Equality Through Banking Tech

Improving Financial Equality Through Banking Tech

America continues to enjoy consistent economic growth, yet, income equality remains at a high level. According to research analyzed by, the USA remains the most uneven developed country in the world when it comes to income. This lack of equality has been one of the main factors that financial tech – or fintech – has sought to correct, and of the platforms promoted in the world of finance, banking-related techs have been the most effective.

Improving savings levels

According to Quartz, the level of savings that Americans can call on is going to continue to shrink. What’s more, there are huge disparities in savings levels when comparing key demographics such as race, age, and earnings levels. One of the key ways that banking tech have sought to address this is through savings assistance.

Improving Financial Equality Through Banking Tech

At the most fundamental level, this means providing key financial lessons and knowledge that those with low levels of financial literacy need to prosper. On a more technical level, banking apps and savings platforms provide tools to help people save smarter, for instance through micro-savings and explaining more stocks-based savings accounts.

Changing banking access

Another key area of income equality is banking access. Millions of Americans don’t have access to banking facilities, and often, it’s demographic minorities who need help; for example, according to CNBC, 12% of Hispanic households have no bank account.

According to Thomson Reuters, this is changing with the rise of decentralized finance (Defi) and open banking. Both tools enable those who have historically had no access to banking to create bank accounts, enhancing their access to mainstream financial resources.

Improving protections

Consider also how financial crime targets low-income families. According to the American Bar Association, the link between financial and ID fraud and low-income individuals is so well-defined that, as a whole, identity theft can be defined as a low-income issue. Banking tech vastly improves both access to information to combat this, as well providing greater levels of security and authentication to prevent attacks when they do occur.

Further advancements in financial tech, and banking tech specifically, will only help to reduce income inequality. The crucial point in all of the developments that have helped the most is that they provide information. Giving tools to people to make the right decisions is the most powerful assistance any banking tech platform can give to consumers and will continue to drive down inequality.