The Financial Literacy Innovation Challenge has the aim of improving financial literacy by supporting an innovative, early-stage fintech helping drive financial inclusion
The World Economic Forum (WEF) has launched a new initiative to recognise and support fintech companies developing innovative ways for improving global financial literacy.
Entries to the Financial Literacy Innovation Challenge are now being accepted by WEF’s Global Future Council (GFC), which has been tasked with running the scheme and selecting a winner.
Applications are open to early-stage fintechs working on products that promote and facilitate better financial literacy, and will be assessed on several criteria relating to the potential for boosting global financial inclusion.
GFC co-chairman Axel Lehman, who is also president of UBS Switzerland and UBS’ personal and corporate banking divisions, said: “With this challenge, we will promote innovative solutions to improve financial literacy – an essential pre-condition to empower people financially in an increasingly complex and digital world.”
The winning fintech will be supported and publicised by the GFC and gain access to its network of financial experts, as well as being invited to participate in its annual meeting in Dubai later in the year.
Why the WEF launched a scheme for improving financial literacy
The WEF launched the initiative as a way to address issues of financial literacy across the world, as more people become integrated into the economic framework – often through digital means like mobile banking.
The organisation cites research from the Global Findex database – which was originally funded by the Bill and Melinda Gates Foundation, and operates in conjunction with the World Bank – showing that more than 1.2 billion adults have gained access to the finance system since 2011.
This means increasing numbers of people globally are coming into contact with personal finance activities, many of whom might not have a large amount of experience with money management.
And with 1.7 billion people still living outside the global financial system, there is plenty of scope for further first-time engagement with financial services in the near future.
By championing fintechs that are coming up with new ways to help these newly-banked customers, and giving these young start-ups a chance to reach a bigger audience, the WEF hopes to improve financial inclusion across the world.
What is the criteria for the Financial Literacy Innovation Challenge?
To be considered for acceptance to the scheme, companies must have a focus on improving financial literacy by developing tools designed to help people engage more proactively with their money.
Fintechs that have received less than $3m (£2.3m) in funding since they were established, and have launched their product in the last two years are free to apply, provided their founders hold an ownership stake in the company.
The GFC will evaluate applications based on their focus on disadvantaged populations, the novelty and distinctiveness of their offering, and the reach and scalability of their platforms.
The sustainability and cost-effectiveness of business models, as well as the diversity of management teams will also be considered by the judging panel.
Entries are open until 3 May, and a final decision will be made by 1 July.