Competitions as a Way to Encourage Innovation for Financial Inclusion

As with almost every aspect of our lives, commerce is also seeing digitization at various levels. Today, electronic money is being used for transactions worldwide and access to digital finance and electronic payments is soon becoming a necessity. The inclusion of all sections of society in this arena, especially in emerging economies, will become absolutely necessary for global economic stability in the long term.

Digital financial services in the field of payments, credit, savings and insurance, enabled by mobile phones or other forms of technology, have the potential to reach people of all walks of life. However, despite the promise, mobile payment platforms are yet to become access-friendly to a bulk of the world’s population. With financial inclusion already gaining momentum in the banking sector, mobile payments companies are also now evolving and taking steps to address this opportunity.

This is where the larger players and global philanthropic organizations are coming in with a new way to encourage innovators to focus on this space. To encourage innovation in banking and payments, especially with financial inclusion in mind, companies are now going all out with competitive hackathons and other such challenges, that are being organized worldwide with monetary and other incentives. These hackathons are typically enabled by providing access to APIs and data sets, in addition to support from experts during and after the competitions.

The goal of these FinTech challenges is to encourage the development of new mobile payments technology. During such hackathons the sponsoring companies provide developers (competitors) with the tools and the inspiration they need to build enabling products which can improve the payments industry. The main activity is to code, construct ideas to improve e-payments and network with other stakeholders in the space. Hackathons bring together designers and developers who can build products and leverage new mobile payments technology. These challenges typically bring together talent and technology in the fun environment with a potential to learn and innovate in a collaborative fashion.

These days, hackathons are being organized across the globe enabling innovation in payments and commerce. PayPal’s series of global hackathons, BattleHack, is one of the biggest competitive events organized in mobile payments. Wells Fargo, Citi and Mastercard have also supported this type of innovation recently, with hackathons around the globe. In fact, Let’s Talk Payments was one of the first independent organizations to conduct a series a hackathons (The Money Challenges) in 2014 to encourage and demonstrate the power of open platforms at the intersection of mobile and money.

The Bill & Melinda Gates Foundation, through the Grand Challenges Exploration, also seeks to improve financial inclusion by promoting universal acceptance of mobile payment systems among merchants who sell goods to the world’s poor. Another prominent company making an effort to encourage innovation for financial inclusion is The Wall Street Journal, with its Financial Inclusion Challenge to address the difficulties affecting individuals’ ability to join and stay in the financial mainstream in the Asia-Pacific region.

These kind of competitions not only effectively contribute to the innovation in payments and financial services in general, but they also provide a platform for designers, developers and coders to work together and gain recognition. Now, these challenges are becoming drivers of innovation that works toward financial inclusion.