Regulatory Evolution for Financial Inclusion
Key points to remember
Along with industry knowledge, slight nudges from policy makers have now led key institutions to take steps to embed strong corporate social strategies and incentives to innovatively develop products and services, investing in underserved communities and partnering with institutions outside the industry to address the many challenges. In this issue, we noted the momentum of how the industry is tackling potential inequalities, including:
Financial institutions need to quickly adopt products and services to comply with regulations that make housing more inclusive. Federal and state governments have begun prioritizing and defining policies and investments to create greater access to opportunities in the housing sector.
The value of alternative data is increasing dramatically as institutions, especially fintechs, gain market share through more accurate and inclusive credit decisions. Fannie Mae is now turning to including lease payment history to assess creditworthiness in the underwriting process.
Financial institutions must be intentional in prioritizing their financial inclusion goals for the business. Given the visible increase in efforts in sectors such as housing, credit and banking, the industry will see more reforms which should drive market action among organizations and stakeholders in the future. Many organizations are making progress toward achieving financial inclusion goals in steady steps, putting diversity, equity and inclusion at the very heart of how they operate to bring about real change.