Digital makes the world go round: a reflection

Whatever form money takes, throughout history money has enabled the development of social and economic systems in various civilizations. It allows us to shop for goods and services and enables us to plan and save for the future.

How will our purpose and intention chart the path for the fintech future?

As the saying goes, money makes the world go round.

At the recent Fintech Week London, I had the opportunity to tell my mother’s story, and how circumstances beyond her control have dictated her path – the choices she made and the choices she didn’t get to make.

When we think about choices, when we go about our day to day, we must think about not only the immediate impact of our actions, but the long-term consequences of our action and inaction.

“There is an opportunity cost of doing nothing.”

As we continue on the path to digital transformation, this is even more relevant.

Adapting to the changing world

The use of QR codes has become prominent in recent years, but especially after the outbreak of Covid. In Hong Kong, for example, we scan the QR code in the LeaveHomeSafe mobile app to show proof of vaccination and to access venues (including restaurants) for contact tracing purposes. In some restaurants, we place orders and pay with QR codes in an effort to reduce contact.

Many of us have long been used to contactless and digital payment methods of various forms. But imagine being told now that you can’t order and pay for food on a long-haul flight if you don’t have a credit card preloaded on the airline’s app (as in the case of United Airlines), or you’re not allowed to eat out if you do not have an electronic vaccination card.

In an increasingly digital world, how do you do that? survive without access to smartphones and affordable internet? It is not an understatement when we said that digital connectivity is a fundamental right. Unfortunately, connectivity remains the privilege of only the wealthy or otherwise privileged, with 18% of the world’s population living in internet poverty.

In many ways, it feels like the digital economy is simply replicating the economic inequalities that exist in our analog world today.

Silver lining and the playoffs

Still, all hope is not lost.

According to the World Bank’s latest Findex database, access to formal and informal financial services and digital payments has increased dramatically over the past decade. Globally, 76% of adults held an account at a bank or regulated institution in 2021, compared to 51% in 2011, representing a 50% increase. Much of the gain has been attributed to improvements in digital connectivity, as well as the pandemic and social distancing restrictions accelerating digital payment adoption.

But gaining access is only the beginning; how we are going to make it possible for more people to live a better life must be our ultimate goal. Globally, almost half of the world’s population (3.3 billion people) is estimated to live below the poverty line of $5.50 per day.

According to the London School of Economics in a report published last November, a third of the self-employed said they had difficulty managing basic expenses. And this is not something that just going digital or cashless can solve. In fact, it has been reported that people who pay by card have a less accurate recall of their expenses than those who pay by cash; and those who use PFM tools are just as likely to accumulate debt. No wonder some are returning to cash, the tried-and-true method, as a means of controlling spending and managing their budgets.

It looks like our work is far from done. But even if we have the tools and resources to do more and do it better, how will our purpose and intent chart the path for the fintech future?

If not now, when? If not us, then who?

It is the opportunity cost that we must consider.

About the author

Theodora (Theo) Lau is the founder of Unconventional Ventures. She is co-author of Beyond Good and co-host of One Vision, a podcast about fintech and innovation.

She is also a regular contributor to top industry events and publications, including Harvard Business Review and Nikkei Asian Review.