The Promise of Fintech Date:   Friday , November 18, 2016 Headquartered in the U.S., Metlife is world\'s leading life insurance company providing annuities, employee benefits, and asset management too. Operating in more than 50 countries, the entity serves approximately 100 million customers across the globe. India\'s identity as a tech hub and start-up leader is the stuff of legend at this point but this legend is grounded in hard data. India\'s 4,200 startups in 2015 put us in third place globally, behind only the U.S. and UK. Along with being a key driver of India\'s economic growth, our technology sector holds the promise to solve some of our nations and the world\'s most urgent social and development challenges. One of those is financial inclusion. While the upper class may take financial services like bank accounts, credit cards, savings, loans, deposits, and payments for granted to manage their lives, it is hard for many to imagine what life would be like if these services were gone. So, consider the lengths to which someone like Seema must go just to manage her daily financial life. Seema is a rural woman who relies on cash benefits from the state to make ends meet. Even for someone who wasn\'t six months pregnant, as Seema was when I first met her. It would be impractical to walk seven kilometers the distance to the nearest bank branch every time she needed to deposit or withdraw money. So, Seema and hundreds of millions of low-income Indians like her hide cash at home, borrow from equally stressed family and friends or from moneylenders in emergencies and spend hours standing in lines to pay bills in cash. Fintech is a major, realistic step in solving this problem on a meaningful scale. Even amongst low-income Indians, mobile phone penetration is significant. Our 1.25 billion people already have more than 900 million mobile phones, and we are expected to add 300-400 million new smartphone users just in the next two to three years. While mobile banking makes life easier for the already-banked professional classes, for people like Seema, it can be life-changing. If her bank is suddenly as close as the phone in her pocket, she can receive her cash benefits digitally right into a mobile-enabled account, avoiding the delay and stress of walking to and waiting at the government office, where she may fear being pressured to pay an opaque fee. And, instead of cashing out the entire benefit, she can withdraw part of that amount from a local mobile money agent. Or, she might purchase groceries from him with part of her mobile money and save the remainder on her mobile money account where it is out of sight and safe from thieves and even family, friends, and her. Compare this to the stress and risk she went through when she was forced to operate in cash. Now, multiply that experience times hundreds of millions of people, 20 percent of India\'s total adult population is unbanked and a significantly larger portion of the population is under-banked and you can see why FinTech is the source of so much investor excitement. Recently, KPMG reported that fintech investment in India grew more than 500 percent last year, from $247 million in 2014 to more than $1.5 billion in 2015. Another report from NASSCOM found that there are close to 400 companies in India focused on the global fintech market. Part of the reason for India\'s Fintech boom is the addressable market. We are home to the largest share of the world\'s unbanked population. Another part of it is undeniably our position as Asia\'s technology hub. And a very important factor is the enabling environment. India is widely recognized for its passionate commitment to full financial inclusion. Through a combination of incentives and mandates, India has been rapidly expanding access to banking, opening 200 million new accounts in 2015-2016. The challenge is to ensure that the new accounts are actually being used; at least 40 percent of accounts are currently dormant. After all, if people just receive money into their accounts and then immediately convert it into cash which they again hide at home, we haven\'t really solved the problem of what Peruvian economist Hernando de Soto famously called \'dead capital\', money locked up in mattresses or hiding places at home, rather than circulating in the economic bloodstream of the country to fuel productivity and growth. Here too, FinTech holds enormous promise. As smartphones make it ever easier for all Indians, including low-income segments, to make purchases and pay bills, they will rapidly build a vast store of data which banks and other financial services providers can use to make decisions in ways that were never before possible. Someone like Seema would never have been visible to financial institutions, but she may be able to leverage her digital footprint to demonstrate her money management, spending her benefits payments in weekly sums rather than all at one; she may be able to demonstrate her savings ability, as she grows balances; she may be able to demonstrate on time repayment to her MFI in order to request a larger loan for her business. Again, it is critical to remember that there are hundreds of millions of people like her -hard working, responsible, and enterprising, all over India. The amount of \'dead capital\', financial and human, locked up in India is enormous. So, too are the gains, material and otherwise, that may be reaped on the individual, community, and national levels by unlocking it. At MetLife Foundation, where I head up grant making across Asia, we have responded to the potential of the vibrant FinTech industry in India. We support several reputable financial inclusion institutions in India to strengthen their digital capabilities and solve for the last mile problem. I think Seema might agree, too, that FinTech holds the key.