DigiPay Marketing VP: Fintechs Have the Opportunity to Improve Users’ Financial Literacy
Fintech companies in Iran are set to play a vital role in addressing the nation's financial literacy challenges, paving the way for a thriving startup ecosystem. These platforms are ready to tackle the hurdles of trust and regulation head-on, with a mission to empower users and drive growth through accessible financial education.
This analysis, sourced from Iran’s News, explores the pivotal role of fintech companies in enhancing financial literacy, particularly within the context of Iran’s Startup Ecosystem. Drawing on insights from DigiPay’s Marketing VP, the discussion highlights the significant global gap in financial understanding, with a more pronounced deficit in developing nations. Fintech platforms are the key educators in this space due to their widespread user interaction. The text boldly delves into the challenges hindering financial literacy development, including rapid technological advancements, trust deficits, and regulatory hurdles. It emphatically highlights the tangible benefits of improved financial literacy for both users and fintech businesses, such as enhanced user engagement and reduced default rates.The analysis concludes with a call for collaborative investment from the private and public sectors to integrate financial education into fintech services, recognizing it as a strategic imperative for sustainable growth and a vital component of a thriving financial technology landscape within Iran.
The Marketing Vice President of DigiPay stated that fintechs, as points of contact for users with new financial technologies, play a key role in the development of financial literacy. He noted that fintech businesses benefit from improving financial literacy, and education has an immediate and direct impact on users’ financial behavior. This is a critical topic in Iran’s Startup Ecosystem, where financial tech is rapidly evolving.
Mohammad Hassan Farazmand, speaking at the 21st Finap event, referred to statistics from organizations such as the OECD, according to which only about 52% of adults in various countries around the world have the most basic financial skills. He said, “In third-world countries like Iran, the issue of low financial literacy among people is more severe. You may have often heard the phrase, ‘I can’t sleep at night if I borrow money,’ or ‘Whenever I have money, I buy in cash and don’t go for installments.’ These indicate that due to a lack of financial literacy, people cannot analyze the situations they face, which leads to either passivity or wrong decisions.”
He added, “But why is the position of fintech important in the development of financial literacy? Due to the influence of fintech products in people’s lives, fintechs have become points of contact that can provide small, short, and effective training to individuals so that they can make the right decisions in their financial lives. On the other hand, as long as users do not have a clear understanding of fintech services, the most critical capacities of fintech will be ineffective or less effective.”
Challenges of Developing Financial Literacy (Iran’s News)
The Marketing Vice President of DigiPay, referring to the key challenges in the path of developing financial literacy through fintechs, stated, “One of the challenges in developing financial literacy is the high and faster speed of technology compared to the acquisition of financial literacy by individuals. In addition to users, some institutions and small and medium-sized companies also do not have sufficient financial knowledge and cannot easily use financial technology tools.”
Farazmand added, “The next challenge is trust as the foundation of accepting new financial technologies, and another issue is the increasing pressure from regulatory institutions. Regulatory institutions almost resist innovation and mostly show a negative approach, while the experience of many developed countries has shown that if regulatory institutions, instead of negative reactions, guide financial technology companies to educate their users, much better results will be achieved.”
The Marketing Vice President of DigiPay, pointing out that the shortcomings of rating systems and their lack of comprehensiveness cause people to exhibit behaviors that are contradictory and inconsistent with credit health, said, “Many times, people do not repay their two million or five million Toman loans and are not aware that with this small delinquency, their credit rating is damaged, and consequently, they are prevented from receiving larger and more effective loans in their lives.”
He explained, “Wherever we have educated our users at DigiPay, we have seen that they have started to build their credit rating with a proactive behavior, meaning that education has an immediate and direct impact on user behavior.”
Benefits of Users’ Financial Literacy for Businesses (Iran’s Startup Ecosystem)
Farazmand, posing the question of who benefits from educating the community about financial literacy, stated, “Sometimes when we talk about financial literacy education, some people think of CSR, and this view leads to less interest in educating users. But we must know that our main beneficiaries are users and consumers of fintechs. Increasing the level of users’ financial literacy leads to users making more correct, timely, proactive, and responsible decisions, and on the other hand, it helps companies to have more users and also control their default rate. The gap between the default rate of third-world landtechs and landtechs in developed countries proves this claim that the higher the financial literacy of users, the lower the default and delinquency rate.” This is especially relevant to the growth of Iran’s Startup Ecosystem.
The Marketing Vice President of DigiPay cited active user participation, technology complexities, and the issue of privacy and data security as challenges in developing financial literacy and said, “Each of these challenges can be solved by companies investing in the development of financial literacy and considering a meaningful cost-benefit.”
Farazmand reminded, “Private companies, along with government institutions and regulators, must make targeted investments together to develop financial literacy. Integrating financial literacy into fintech services is a commitment that businesses have to society and people, and their own benefit is also defined in it.”
