Digital “non-bank” platforms and apps are promising to demystifying complex financial processes, personalise customer experience and offer round-the-clock convenience. Whether you’re paying off debt, budgeting, getting started with investing or saving for retirement, there is likely to be a fintech app to help you.
However as digital technology replaces human decision making, we need to ensure that the algorithms that will increasingly decide our financial fate do not reflect the unconscious and often unhelpful biases of their creators. As artificial intelligence expert Clara Durodié points out, “algorithms have parents”. In mathematician Cathy O’Neil’s terrific book Weapons of Math Destruction she outlines the importance of both intention and design in electronic decision tools. She suggests that a far scarier, and more likely, scenario than machines taking over the world, is the prospect that current disadvantage is entrenched in our society by poorly designed, opaque and largely unchallengeable algorithms. Overweighting of factors such as ethnic origin, postcode, or marital status may adversely affect access to, and cost of, capital and other critical financial products, particularly for those from less affluent backgrounds.
Here are some examples of Australian fintech start-ups that are doing a great job of building diverse teams to deliver on the promise of new technology, in an inclusive way.
Investing with minimal effort
Micro-investing offers even the least savvy investors cost efficient, easy access to the tools they need to create a well-diversified portfolio. Millennials have been the early adopters of these investing platforms that use highly specialized software to do the job of wealth managers. FirstStep Investing, which recently launched as a competitor to Acorns, automates the entire process, siphoning off your “spare change” and investing it for you and facilitating regular saving plans. This is a great solution to the perennial problem of getting started as an investor young enough to maximise the power of compounding when it is most beneficial, but when your employment income is at its lowest. It is also a great behavioural hack, making saving automatic not something that requires ongoing conscious effort.With a diverse ethnic background amongst its founders and a majority of women on its board, FirstStep is demonstrating that fresh thinking about old problems often comes when you bring together the right mix of people.
Getting a great deal on your home loan
HashChing is Australia’s first online market place for home loans. Siobhan Hayden, chief operating officer and former chief executive of the Mortgage and Finance Association of Australia, has worked hard to integrate smart technology with a fair deal for both customers and providers. Hayden explains that growing up in a working class family where her parents were not always treated well by their employers, has made her committed to building teams that honour the contribution of all members and which bring diverse perspectives. The approach seems to be paying off with just over $17 billion worth of home loan applications processed since HashChing’s inception, and a number of business and fintech accolades.
Given the size of the superannuation savings pool in Australia, there has been a proliferation of new digital disrupters entering the market in recent years.
One aspiring new entrant to be aimed at tech savvy, value driven millennials is Zuper, led by chief executive and co-founder Jessica Ellerm. With solid technology credentials from her time with online payments company Tyro, Ellerm is also a world-class viola player who studied at the Royal Academy of Music in London. It’s her experience working with orchestras that helped her really understand what makes a team hum.
Zuper is planning on harnessing these behavioural insights, together with machine learning to connect more effectively with members and entice younger savers to really embrace their superannuation investments. They are looking for technology to make the engagement with super less complex and more enjoyable.
As new technologies emerge, as consumers we will have the capacity to make choices on a range of variables. Supporting fintech companies with diverse teams, offers the opportunity to benefit not only ourselves, but also the broader community.
Article by Catherine Robson. Published by The Sydney Morning Herald, March 15, 2018.