30 Apr CEO: Financial Tech Needs More Diversity, and Disruptions Help
Technology is disrupting and transforming the financial world, but the financial tech industry needs a more diverse workforce if the resulting system is to be more inclusive of women and minorities, an entrepreneur told the eMerge Americas conference Tuesday.
Ramona Ortega, founder and chief executive officer of My Money, My Future, a financial management platform, talked about ways technology is disrupting traditional financial services and creating opportunities for social innovators to tackle long-standing problems like poverty, wealth inequality and financial inclusion.
She said financial technology, or FinTech for short, includes any technology that addresses transactions whether they are payments, banking, savings or credit.
“The bigger problem we are trying to solve is economic inequality in this country,” Ortega said. “Right now we are facing an economic crisis in terms of a racial wealth gap.”
The daughter of farmworkers who spent their early lives in poverty, Ortega said she understood the importance of economic opportunity, the cost of being poor and the effects that generational poverty has on minority groups. She set out to address it, first in the public policy sector and now as an entrepreneur.
“When you are poor, when you are struggling, it affects every other piece of your life in terms of well-being — educational outcomes, health outcomes,” Ortega said. “When you are in this space of survival, there’s very little room for innovation. You have no space in your life to think about the next big thing or start a company or how to solve social problems. Yet we need diversity in tech to find the solutions.”
Ortega said 138 million Americans, particularly minorities and women, are struggling financially and many don’t have the skills to pull themselves out of poverty because financial knowledge is often family-learned.
“We need to have diversity of thought and solutions particularly in FinTech if we’re going to choose economic inclusion,” Ortega said. “If we really want to attack big social problems, we need diversity of thought in terms of innovation.”
She left her job as a securities attorney last year to concentrate on her startup, which provides tailored content and simple-to-use financial help for millennials, particularly young women and minorities. The website helps with personal financial management, automates budgeting, offers financial decision guides and helps millennials choose the best financial products from a selection of investment partners to whom her business provides leads.
The disruptions are caused by automation in what used to be labor-intensive functions like trading and personal finance advice and management as well as lower costs for and better access to money transfers and capital. She pointed to a Securities and Exchange Commission rule issued last year allowing companies to offer and sell securities through crowdfunding.
“This used to be the exclusive domain of qualified investors, and that’s basically 5 percent of the population that was able to make that qualification,” Ortega said. “When you look at the way wealth is created in this country, one of the ways it’s created is in investment. When you have rules that say that only a certain number of people are allowed to invest, that’s only a certain amount of people who are going to get the windfall of a successful investment.”
Much of the industry’s transformation involves the underlying transaction database known as blockchain, which Ortega said is taking the middleman out of formal transactions and is the foundation of virtual currency like bitcoin.
“We want to use blockchain to more effectively and efficiently distribute public welfare benefits to people,” Ortega said, adding blockchain may have applications in combating fraud and abuse.
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