Mobile banking and payments have swiftly reduced the number of unbanked around the world in the order of billions. But we’re very far off being able to claim that those now entering the financial system as a result are accessing fair, transparent and useful products and services. It has been technology first – and technologists and data scientists are not inclusive finance experts. Nor are inclusive finance experts technologists.
That gap has the potential to be closed, however, thanks to Facebook’s announcement of Libra, a decentralized cryptocurrency that will allow users of the social platform and WhatsApp to easily send each other money and make online purchases, and thus, supposedly, increase access for the unbanked or underbanked.
There are, however, doubts whether the financial inclusion intentions for Libra will be successful. One has to imagine that anyone accessing Facebook or WhatsApp on a mobile already uses some form of mobile payments system, so what problem is Libra solving exactly?
Then there’s the argument that not being able to cash out will dampen its usefulness in remote, underbanked communities. There are also doubts whether intentions for Libra to reduce financial exclusion are even sincere.
These doubts are almost irrelevant, however, when one considers how the much-needed conversation around fintech and responsible finance just got amplified by a power of ten thanks to Facebook’s visibility and, yes, its poor track record around responsibility and ethics. All eyes are on Libra.
What’s more, Libra is backed by a non-profit association of founding members that spans technology, financial inclusion non-profits, telecoms, payments companies and NGOs, and more stakeholders are expected to be recruited throughout its development.
It gives the opportunity for the work of organizations like Accion that have developed guidelines around data privacy and consumer protection to sit at the table with developers and start with a fundamental question that has so far been skipped: what would this fintech solution look like through the lens of responsible finance?
Isabelle Barrès at Accion’s Center for Financial Inclusion points out that this is a chance to answer key questions about protecting the underserved. What would data privacy agreements look like if we wanted them to be understandable, fair and with an option to opt out? How would algorithms for users be set up that did not discriminate? How might fully transparent, low-cost and high-quality products and services that truly solve problems be brought to bear?
The conversations Libra affords could end up having broader and more positive implications than simply another cryptocurrency.