The use of Financial Technology to improve Financial Inclusion in the Funeral Insurance industry in South Africa

Abstract

This research examines the role of financial technology (FinTech) in improving financial inclusion (FI) within the South African funeral insurance industry, focusing on enhancing access, usage, and quality of financial services products. The study addresses challenges faced by the industry, including limited access to cost-effective funeral insurance, low levels of financial literacy, and consumer protection concerns. Employing a quantitative approach, the research surveyed Absa Insurance staff in operational and change management roles within Gauteng to assess the extent to which FinTech aids the FI mandate in this sector. Findings reveal a growing acceptance of digital technologies and a positive perception of FinTech's impact on accessibility and ease of use. Key factors influencing adoption include user-friendly design, availability of educational resources, and product variety. However, challenges persist, notably the digital divide affecting rural and low-income individuals, and concerns regarding cybersecurity and regulatory adequacy. The study indicates FinTech's potential to streamline the claims process and enhance financial literacy. The research concludes that while FinTech offers significant transformative potential for FI in the funeral insurance sector, its successful implementation requires addressing user trust, regulatory frameworks, and digital literacy gaps. Recommendations include prioritizing user-centric design, bridging the digital divide, enhancing regulatory compliance and transparency, streamlining claims through automation, and promoting financial education. A collaborative approach among stakeholders is essential to harness FinTech's capabilities for a more inclusive financial ecosystem in South Africa.