Fintech founder and author, Theodora Lau, explores the human benefits that emerging financial technologies provide.
/ An interview with Theodora Lau
The following summarizes an interview facilitated by Capterra team member Kyle Rich and fintech expert Theodora Lau. This conversation was edited for length and clarity.
Advancements in technology make our daily lives more convenient, but as that pendulum swings to the latest transformation in financial services, we can’t ignore the call to also drive positive change.
We must ask ourselves, “how can we use technology to help improve our communities?”
To answer this question, we connected with Theodora “Theo,” Lau, founder, podcast host, public speaker, and co-author of Beyond Good[1], who calls for business leaders to employ technology to work smart and grow fast, while also being equitable and empathetic.
We discussed how new financial technology (fintech) solutions are unlocking possibilities that change how companies do business, improve customer experience, and serve forgotten or overlooked groups of people in both advanced and developing nations.
Simple fintech solutions have been transformative to underserved communities
In developing nations, embedding simple fintech solutions in industries like agriculture can make a world of difference. In Mozambique, for example, the vast majority of arable land sits fallow because the farmers cannot afford seeds. Imagine how the world would be if farmers could gain access to financial solutions to better manage cash flow, acquire needed resources, and increase food production.
“What you're creating is not just a better future for the farmers. You also help them create the food source we need. It's a chain impact—we can use that technology to help people live better.”
Theodora Lau
Founder and author
Fintech solutions are also creating opportunities for those who are previously 'unbanked'—individuals with no access to formal banking. While this is typically more common in emerging economies with a less established banking infrastructure, it can happen in developed economies as well. Fintech solutions can help close some of the gaps in countries with a high mobile penetration.
“The super apps (apps that allow multiple services including payment and financial transaction processing) like Alipay and WeChat in China and Grab and GoJek in Southeast Asia have enabled micro entrepreneurs like rideshare drivers to save, invest, borrow, and obtain microinsurance through their mobile phones,” says Lau.
This demographic who did not previously have access to formal financial services now has various capabilities available to them, all powered by the apps on their mobile phones.
Another example is how mobile finance through mobile phones provides a gateway to credit for displaced individuals or emigree populations, who start with a blank slate in their new country, even though they led a full life in their home country.
“It's almost like your previous life doesn’t count,” says Lau. “You have to restart your credit and everything else. But now, we carry our phone with us everywhere, so if we leave with all that data in our profile, we should have an easier start somewhere new.”
Better banking insights help people plan for their futures
Within the sophisticated financial services infrastructure of developed economies, Lau sees an exciting use for AI in banking to help families better predict financial needs and plan over the course of decades. She notes that people are living longer and healthier—thus delaying retirement beyond their 50s and 60s—yet they haven’t changed the way they think about saving, planning, and retirement.
According to Lau, there is a tremendous opportunity for banks to do good by helping customers use their extra time in the workforce to plan better, think differently about finances, and address multi-generational financial caregiving needs.
Lau suggests that banks should take a back step back and ask what their customers need both as individuals and as family members.
“I don't plan my finances for just myself. What I save or spend impacts not just me but also my children and their education, and my parents in terms of how I can help them in 10 years when they’ll need help.”
Theodora Lau
Using AI and big data to help women succeed financially
An overlooked demographic Lau would love to see helped is older adults’ caregivers, typically women, who often lose seven to 10 years mid-career as they step away from work and take time off to care for their parents.
“What these caregivers lose from a financial perspective is not just the time they took off from work mid-career but also the advancement opportunities they missed and the cumulative impact of their wealth at the end of their work life.”
Theodora Lau
Lau believes AI and big data can better help consumers plan their financial future and insists, “inherently you will create a better future for women if you provide better financial tools for family caregivers.”
Improving the customer experience through convenience
In the here and now, AI powers both simple and complex solutions that improve the customer experience. Lau reminds us of a ubiquitous example that many of us take for granted in the authentication space, where facial recognition (FaceID on your phone) improves security while also making things less clunky for the consumer.
Another consumer convenience example is how automation and AI are creating intelligent dispensers or smart vending machines. Old-school vending machines were often an exercise in frustration; the machine spit your cash back out or wouldn’t accept it because your bill was too crumpled, or you couldn’t successfully scan your credit card. But imagine a fast and seamless experience. Theo recounts one experience in particular.
‘You walk up to the machine, it scans your biometrics. You tap your watch or your wallet on your phone, and you choose what you want to buy. Let's say you want to have a mini bottle of champagne at the end of the day in your hotel. Because the machine already authenticated you, it knows your age, so you pay with touchless payments and off you go, satisfied with a fast and easy purchase.’
Another emerging trend in the consumer space is embedded finance—where finance meets people where they are. In this example, Lau was on a cross-country domestic flight where flight attendants passed through the cabin with their snack cart and their handheld payment device.
An older lady was sitting a few rows in front of Lau, and she wanted to order food. The flight attendant explained that in order to pay for the food, the lady needed to download the app. But because they were already in the air, the lady had her phone in airplane mode and couldn’t get the app. Luckily, a nearby passenger offered to pay for her food, but this is a perfect example of why companies need to think about customer experience.
Lau says that as companies think about solutions, they must simultaneously think about the flip side: What does that mean to the customer?
How small and midsize businesses can harness these trends
We asked Lau what three pieces of advice she would give to small and midsize businesses (SMBs) that want to be successful while also doing good. Her answer?
/ How SMBs can contribute to social good
Talk to the people you're serving. Listen to what they need, understand what they want, and then be intentional in creating the products that they are asking for.
Build a diverse perspective on your team. If you don’t have a wide representation of people on your product team, you can’t create products that serve the needs of a broader audience.
Don’t be afraid to experiment and give yourself room to fail.
What can SMBs do right now?
Finally, we asked Lau what one thing SMBs can concentrate on right now. She suggested you ask yourself these two key questions: How well do you know your customer? What sets you apart from competitors who do something similar?
She leaves us with this advice:
If you want to not just survive, but to thrive, you need to find out what makes you different and why people want to keep coming back and doing business with you. Once you know that, you need to double down on it. Make sure what you’re doing is something that people want, something that resonates with people.
Theodora Lau
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