Financial Inclusion Through Fintech In The Digital Economy

Financial Management in the Digital Economy adopts an integrated approach to synthesize the various areas in finance into a consolidated framework and implements the theories and practices in the world of digital economy. The first part of this book extends the fundamentals of asset management to digital assets, and also covers topics like cryptocurrency and blockchain technology. The next part of the volume discusses the concept of financial inclusion, digital innovations and technology-enabled business model innovations in the financial sector.This book reviews the finance and FinTech ecosystem to provide insights into the most important technological developments in the financial services to better understand the future trends, challenges as well as opportunities for both the incumbents and the start-ups in the fast-changing finance world.

Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.

In 2011 the World Bank—with funding from the Bill and Melinda Gates Foundation—launched the Global Findex database, the world's most comprehensive data set on how adults save, borrow, make payments, and manage risk. Drawing on survey data collected in collaboration with Gallup, Inc., the Global Findex database covers more than 140 economies around the world. The initial survey round was followed by a second one in 2014 and by a third in 2017. Compiled using nationally representative surveys of more than 150,000 adults age 15 and above in over 140 economies, The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution includes updated indicators on access to and use of formal and informal financial services. It has additional data on the use of financial technology (or fintech), including the use of mobile phones and the Internet to conduct financial transactions. The data reveal opportunities to expand access to financial services among people who do not have an account—the unbanked—as well as to promote greater use of digital financial services among those who do have an account. The Global Findex database has become a mainstay of global efforts to promote financial inclusion. In addition to being widely cited by scholars and development practitioners, Global Findex data are used to track progress toward the World Bank goal of Universal Financial Access by 2020 and the United Nations Sustainable Development Goals. The database, the full text of the report, and the underlying country-level data for all figures—along with the questionnaire, the survey methodology, and other relevant materials—are available at www.worldbank.org/globalfindex.

The COVID-19 pandemic has impacted digital financial inclusion trends across the world in many and complex ways. In developing and emerging contexts, this crisis also holds the potential to propel an unprecedented acceleration in the process of financial digitization and turn out to be a game-changer for digital financial inclusion. The aim of this study is to illustrate the opportunities and risks associated with the surge in uptake and use of digital financial service, providing ideas on how to leverage the paradigm changes affecting the overall approach and perspective towards digital financial services – on the part of various stakeholders – to advance financial inclusion and development. It also seeks to showcase how digital financial services have been used – in both traditional and innovative ways – to mitigate the impact of the COVID-19 crisis on economies and societies, by both public and private actors.

We are only in the early stages of a broader revolution that will impact every aspect of the global economy, including commerce and government services. Coming financial technology innovations could improve the quality of life for all people. Over the past few decades, digital technology has transformed finance. Financial technology (fintech) has enabled more people with fewer resources, in more places around the world, to take advantage of banking, insurance, credit, investment, and other financial services. Marion Laboure and Nicolas Deffrennes argue that these changes are only the tip of the iceberg. A much broader revolution is under way that, if steered correctly, will lead to huge and beneficial social change. The authors describe the genesis of recent financial innovations and how they have helped consumers in rich and poor countries alike by reducing costs, increasing accessibility, and improving convenience and efficiency. They connect the dots between early innovations in financial services and the wider revolution unfolding today. Changes may disrupt traditional financial services, especially banking, but they may also help us address major social challenges: opening new career paths for millennials, transforming government services, and expanding the gig economy in developed markets. Fintech could lead to economic infrastructure developments in rural areas and could facilitate emerging social security and healthcare systems in developing countries. The authors make this case with a rich combination of economic theory and case studies, including microanalyses of the effects of fintech innovations on individuals, as well as macroeconomic perspectives on fintech’s impact on societies. While celebrating fintech’s achievements to date, Laboure and Deffrennes also make recommendations for overcoming the obstacles that remain. The stakes—improved quality of life for all people—could not be higher.

This book contributes to the present state of knowledge, offering the reader broad evidence on how new digital technologies impact financial systems. It focuses on both macro- and micro-perspectives of ICT influence on financial markets. The book demonstrates how ICT can impact trading systems or information systems, which are crucial for financial systems to work effectively. It also shows how individuals can benefit from the adoption of digital technologies for everyday financial (e.g., banking) systems usage. The book provides empirical evidence of how digital technologies revolutionize the banking sector and stock exchange trading system and explores the associations between technology and various aspects of firms’ functioning. Furthermore, it raises elements of financial inclusion, ICT-based microfinance service and finance-related gender issues. The principal audience of the book will be scholars and academic professionals from a wide variety of disciplines, particularly in the fields of finance and economics. It will be especially useful for those who are addressing the issues of new technologies and the financial markets, FinTech, financial innovations, stock markets, and the role of technological progress in a broadly defined socio-economic system. It will be a valuable source of knowledge for graduate and postgraduate students in economic and social development, information and technology, worldwide studies, social policy or comparative economics.

Financial Management in the Digital Economy adopts an integrated approach to synthesize the various areas in finance into a consolidated framework and implements the theories and practices in the world of digital economy. The first part of this book extends the fundamentals of asset management to digital assets, and also covers topics like cryptocurrency and blockchain technology. The next part of the volume discusses the concept of financial inclusion, digital innovations and technology-enabled business model innovations in the financial sector. This book reviews the finance and FinTech ecosystem to provide insights into the most important technological developments in the financial services to better understand the future trends, challenges as well as opportunities for both the incumbents and the start-ups in the fast-changing finance world.