The Rise of “Inclusive” FinTech and “FamilyTech” Startups
Today, FinTech plays an essential role in almost all of our daily lives. According to the Ernst and Young 2019 Global FinTech Adoption Index, the adoption rate of fintech is up to 64% from 16% in 2015. That means that more than two-thirds of the world is using FinTech to simplify their financial lives today.
FinTech companies are integrating technology with the way we handle our finances, advancing financial institutions’ capabilities while giving consumers more freedom. We’ve seen FinTech improve the way we handle our finances in many ways: from digital lending and credit, mobile banking, mobile payments, insurance, and even trading, most consumers have been influenced by FinTech innovation.
We’ve seen the emergence of FinTechs such as Stripe, which offers developers ways to accept payments/send payouts, and Square, which empowers small business owners to manage their businesses online. If you go to your local coffee shop or locally owned business, there’s a good chance you’ll pay through Square.
Another successful startup, Robinhood, offers accessible ways for the average person to invest their money online through commission-free trading of stocks, ETFs, options, and cryptocurrencies.
How Cash is Integral for Inclusivity in FinTech
As the exponential growth of fintech has produced more and more ‘cashless’ businesses, the accessibility of these services needs to be evaluated. According to estimates, a little more than 20% of the world population is “unbanked”, a demographic that should not be forgotten during the FinTech transition to digital and contactless banking.
About two-thirds of the previous demographic have a mobile phone, suggesting that complete financial inclusion is just around the corner if financial institutions take action. The best way to support people’s financial lives is to make banking convenient, flexible, and secure. Financial inclusion doesn’t just affect those directly involved, but instead impacts entire communities. FinTech has completely changed the way we interact with money, providing transparency and balance.
It is just a matter of time before the industry will play a more critical role in supporting those who are unbanked and need more financial literacy and access. While there is still a large demographic that is yet to benefit from FinTech, there is an even larger amount of people who have already seen how it can positively impact their lives. From daily transactions and filing taxes to the education of the next generation, FinTech has cast a wide net with its influence.
The Emergence of “FamilyTech”
Since the early 2000s, we’ve also seen the emergence of family technology startups, which are now commonly referred to as “FamilyTech”.
Millennials are one of the first generations to grow up integrated with technology and now that they’re becoming parents, they’ve continued to rely on technology for parenthood. As people began to notice this massive business opportunity, FamilyTech startups emerged to help equip parents with the technology they need to navigate having a family of their own.
Amy Schulman, a partner at Polaris Partners described the significance of FamilyTech for families in today’s society in an interview with Crunchbase News: “This is now a fundamental category because what is more important than how to set a family up for success?”
The emergence of FamilyTech can be broken down into four types of startups; each sector helps parents navigate a different, yet vital part of raising a family. These are EdTech, childcare, youth sports, and pediatric healthcare.
Let’s dive into these types of emerging startups we’re seeing.
EdTech
Traditional K-12 education is changing as technology evolves, with EdTech startups leading the revolution. HolonIQ predicts the EdTech market will reach $404B by 2025, expanding 2.5x within 6 years.
These startups, such as Kahoot! are utilizing technology to enrich the way our children learn. Kahoot! is a game-based learning platform that gives students a break from traditional learning in a fun, interactive method. With a mission to “Make learning awesome!”, Kahoot! is now used by over 97% of Fortune 500 companies.
Childcare
For parents, finding trustworthy childcare without spending a fortune is often a nightmare. Parents in Ohio have to shell out almost 20% of their income for child care, according to the EPI. This is about the same as in-state tuition at a four-year public college.
Childcare startups, such as Wonderschool, have found ways to use technology to connect in-home child care providers with families while lowering families costs. Wonderschool is a centralized digital platform that helps childcare providers care for small groups of children. The platform found that by providing smaller child-provider in-home ratios, they can help lower the overall cost for families.
Youth Sports
A fundamental part of growing up for children (and parents) is athletic development. Youth organizations such as little leagues often lack the centralized structure needed to manage and grow. Not only is there a lack of central management, but there is also a lack of accessibility, particularly for lower-income families. Cost is the main reason kids don’t participate in youth sports in families earning $50,000 or less.
LeagueApps is a digital sports management platform that aims to fix this issue through connecting organizers, coaches, and parents. This startup is providing youth and local sports leaders with technology, partnership, and community. Through technology, community, and advocacy, this startup has taken great strides in making sports more accessible.
Pediatric healthcare
The healthcare industry has revolutionized in the past few decades with the help of startups’ capabilities and speed to find solutions. However, startups’ influence goes far beyond faster turnaround times: startups can provide crucial tools for patients and doctors alike.
In the pediatric world specifically, accelerators like KidsX are accelerating innovation worldwide. KidsX brought together 13 startup companies to lead the relationship between top children’s hospitals and digital health companies to build, test and deploy software solutions to make pediatric care exceptionally effective, safe, efficient, and convenient for children and families.
“We’re proud of our inaugural KidsX Accelerator cohort and could not be more eager to lend our expertise and guidance as they create tangible solutions that will transform the pediatric digital health innovation landscape, which has suffered in the past from lack of funding and support” says Omkar Kulkarni, Chief Innovation Officer at Children’s Hospital Los Angeles and Managing Director of KidsX.
Merging Inclusive FinTech with FamilyTech
Many K-12 school districts only accept digital payments, creating challenges for families who don’t have access to online banking. In America, around 30% of K-12 families are intimidated by or entirely locked out from the banking system and left to rely on physical cash and check cashing to make household finances work. Pay Theory, an FamilyTech startup, is creating a more inclusive environment for families to pay for their children’s K-12 education.
“This is the type of innovation that our country needs to put all of our families on a firm footing. I am proud to be a part of this important bridge to economic empowerment for all of our families.”, said Ed Rigaud who recently joined the Pay Theory team after previously serving on the Board of the Federal Reserve Bank of Cleveland.
While we still have some time before every aspect of our lives is affected by Fintech in one way or another, it is evident that it already plays an essential role in our personal lives, as well as how the world functions as a whole. New startups in this industry are created every day, and the possibilities are endless for creating a more accessible and functional world.
What do you think the next big step is for fintech?
