How Behavioral Science Can Improve Digital Service

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Foundations: Support financial health startups with catalytic capital
Blended finance is not new to financial health innovation – some of the earliest instances of development and philanthropic funding complementing private capital have come from the world of fintech.

This approach seems to be very common for financial health startups today: Our report found that one in four financial health startups receive philanthropic funding.

This philanthropic support comes in a variety of different methods, the most common of which is grants – for instance, small gifts to advance the development of a certain product, or prizes from pitch competitions. But more and more funders are making direct investments in early-stage startups.

For instance, MetLife Foundation recently launched its Financial Health Innovation Fund (which is managed by Village Capital), to invest directly in early-stage financial health startups. The foundation made a program-related investment to launch the fund, giving it the opportunity to achieve both impact and financial returns on its investment, and sending a powerful market signal that foundations can use different financial tools to seed the innovation economy.



Policymakers: Create rules and regulations that france whatsapp number data promote, not inhibit, fintech innovation
Regulation can make or break fintech innovation in a given country or region.

There is a good reason that fintech regulation exists: Consumers need protection, and financial institutions need guardrails. To create a regulatory process that doesn’t stifle innovation, some countries have introduced “sandboxes” and experimental policies that allow innovators to develop new approaches, while providing an onramp to compliance. That often takes the form of “startup acts” – legislation specifically designed to support startups, address regulatory barriers and provide a legal framework for entrepreneurship. For instance, Mexico was the first country in Latin America to enact regulations that set nationwide standards that govern fintech innovation.

Other startup bills are broader. For example in Tunisia, the government passed the Tunisia Startup Act in 2018 to incentivize entrepreneurship in the country. The legislation was praised as a “bottom up” bill that was designed with input from entrepreneurs. It included government support for entrepreneurs (for example, exemptions from corporate taxes, and a “startup grant” that covers founders’ living expenses for a year), while also adding clarity to the definition of a startup

But as promising as these developments are, more progress is needed. In order for financial health innovation to thrive around the world, we need all actors, both private and public, to re-evaluate the role they play in supporting startups. We hope our report can help provide some guidance – and inspiration – to these efforts.