The Digital Path to Citizen-Centric Finance
Global finance has become detached from people’s needs and preferences. But by harnessing the disruptive potential of digital technologies, the world can create a fairer, more inclusive financial system that propels sustainable development.
NEW YORK/JOHANNESBURG – Today, “mobile money” – a service enabling people to send, receive, and store money on a cellphone – allows a market trader in Kenya to borrow a modest amount at sunrise to buy her stock, and then pay it back at sunset from her daily earnings. This seemingly simple micro-level exchange has the power to support livelihoods, increase access to health and education, and improve the lives of people in every country. And the digital revolution in financial technology, or fintech, is extending the reach of finance into many other new domains.
By the end of 2020, one billion people worldwide will use mobile money,with Sub-Saharan Africa having the highest penetration rates. But fintech also underpins multi-billion-dollar carbon markets, plays an essential role in the fight against illicit financial flows, and is pivotal to improving tax collection and boosting the effectiveness of public spending. In short, digital disruption could bring about a radically different, citizen-centric financial system.
Such a change is badly needed, because today’s global financial system seems to follow a logic that suits those working in it. As International Monetary Fund Managing Director Kristalina Georgieva recently emphasized, there is an urgent need to “return the financial services industry to what it is supposed to be – an industry that serves people.”