Harnessing the Digital Revolution for Sustainable Development
The digitalization of finance is essential to improving lives in the Global South and achieving eight of the 17 UN Sustainable Development Goals. But to capitalize on fintech's potential, lenders and investors need a coordinated strategy; a new United Nations task force could provide one.
JOHANNESBURG/NEW YORK – Financial digitalization – the digital revolution’s system-level transformation of the entire financial ecosystem – could catalyze global efforts to finance sustainable development. According to the McKinsey Global Institute, the expanded use of financial technology could drive growth across developing countries by up to $3.7 trillion by 2025, thanks mainly to increased productivity gains and broader financial inclusion.
But if the promises of digitalization are to be fulfilled, the world will need to align financing and investment strategies more tightly to sustainable development outcomes. Last month, United Nations Secretary-General António Guterres convened a task force on digital financing to tackle this complex challenge. We are honored to serve as co-chairs for this global effort.
For obvious reasons, financing is key to achieving the Sustainable Development Goals (SDGs) and meeting the emissions targets set by the 2015 Paris climate agreement. But although global savings are more than adequate to fuel the transition to sustainable development, the global financial system has so far failed to effectively intermediate supply and demand. The modest success that some countries have achieved in financing sustainable development has not been commensurate with the need.