Professor and research fellow talks financial inclusion, fintech developments

Wednesday, February 12, 2020 - 9:11pm

Adrienne Harris discusses financial inclusion at Blau Hall Wednesday evening.

Adrienne Harris discusses financial inclusion at Blau Hall Wednesday evening. Buy this photo
Hannah Yoo/Daily

The Ross School of Business’s +Impact Studio and the MBA Finance Club co-hosted Adrienne Harris, Towsley Foundation Policymaker in Residence at the Ford School of Public Policy, at the Business School for a discussion on financial technology, or fintech, and financial inclusion in the U.S. About 90 people attended the event on Monday. 

Harris is currently a Gates Foundation Research Fellow and advises fintech companies, incumbent financial institutions and venture capital firms. Harris has worked in the government and corporate realms developing strategies to address financial inclusion and fintech availability to underserved populations. Most recently, she worked with a San Francisco-based inter-tech startup.

Harris shared her expertise on fintech and engaged in a Q&A dialogue with Business professor Jeffrey Sanchez-Burks, faculty director of the +Impact Studio and Business graduate student Gabrielle Alves, the vice president of diversity and inclusion for the MBA Finance Club. 

Alves said having worked in the legal sector in New York, in politics at the White House and at fintech startups in Silicon Valley, she’s found the hardest problems facing the financial world require different types of knowledge.

“The hardest problems to solve are ones that require people to have a perspective from different sectors, and that’s how I thought about my careers … I needed to have experience in all those places and speak those languages and understand those cultures to be able to bring them together and solve really thorny problems,” Alves said.

Harris also spoke on regulating U.S. financial institutions and challenges in the new age of fintech, where technologies involving machine learning and artificial intelligence have the potential to influence finances. Recent changes and the incorporation of technology into the financial industry have drawn attention to systematic issues and require policy innovation.

“Before, fintech data was just your transaction data … but now everything is financial information,” Harris said. “You take Uber or Lyft, where you went and at what time is now tied up with a financial service, and payment apps — everything has become financial data and everything has become data on which financial decisions about you can be made. The trick is, as a regulator, as a policymaker, is how do you stay close enough to industry to help drive an affirmative agenda, to help catch the no-no’s when they happen, but not stifle innovation?”

Harris said the highly personal nature of money and finance and the unknown role fintech companies will play in possibly perpetrating or amending mistrust in financial institutions. 

“(Finance) is emotional, it’s personal, it’s stressful, it’s all of these things and you’re basically expected to just hand it over, whether it’s the money itself or it’s our login,” Harris said. “When fintech first came along they were like, ‘We’re not the big financial institutions.’ ... But that also used to be the case, sort of, with Google and Facebook, so we’ll see how this changes. I think we start off feeling trustworthy and become less so over time.” 

Alves discussed some of her motivations behind organizing this dialogue. Alves said the event took place as part of diversity week at the Business School, which aims to bring awareness to key issues regarding access to financial institutions and trust in them. 

“I thought of why I wanted to do an event on financial inclusion and what did I want to learn more about and what did I also want my peers to hear about in terms of financial inclusion,” Alves said. “Some of the main points (were) trusting financial institutions and getting traditional banks or bigger financial institutions to actually serve these underserved communities and populations.”

Harris elaborated on the potential for fintech companies to help decrease the cost of providing traditionally “underbanked” people, or those without frequent access to mainstream financial services, with access to credit as well as educating people on financial health. 

“Historically, people have said it’s too costly to serve those populations because they don’t create enough revenue for the institution,” Harris said. “Fintech sort of came about with the promise of we’re going to use tech to drive down the cost and therefore that ratio will be going back and we'll be better able to serve these people.”

Sanchez-Burks said the subject matter of the event was interesting, noting the interdisciplinary aspect of the event.

“There’s a lot of work being done in the studio around financial inclusion and credit … to focus it on fintech and financial inclusion, the dangers and possibilities have got to be very interesting,” Sanchez-Burks said. “We want to be this hub for the University of innovation and partner with other units on campus.”

Harris answered questions from the crowd of students, alumni and faculty addressing topics including fintech’s durability during a possible economic recession.

“A big question in the fintech community is what’s going to happen when there’s a recession,” Harris said. “We just don’t know yet because we’ve only seen fintech in this one economic cycle.”

Harris also addressed the potential to use fintech to analyze wealth gaps in the U.S. and the role that race plays in accessing credit and financial resources. 

“Because of the history of this country around race, there are wealth gaps, income gaps that tend to, themselves, perpetuate,” Harris said. “I’m hopeful that part of what technology will allow us to explore is our conceptions about this.”

Business freshman Isabella Conti attended the event and expressed her interest in fintech, considering its potential to increase financial access in underserved communities. 

“(The talk) brought up a lot of things that I’d never thought about, with the future of finance and technology and how that intersects,” Conti said. “My family is Latino and my parents are both immigrants, so how this could help underprivileged people and demographics was really interesting to me, as I know a lot of people who could benefit.” 

Reporter Hannah Mackay can be reached at mackayh@umich.edu.