How FinTech has unlocked new financial opportunities for millions
The global acceleration of FinTech and digital payment solutions since the start of the Covid-19 pandemic has unlocked new financial opportunities for millions of people who previously had no access to bank accounts, Queen Maxima of the Netherlands has said.
“The rise of inclusive finance is genuinely good news at a moment of great challenge,” Queen Maxima said on Monday at the 44th edition of Sibos, an annual conference for the global financial industry held in Amsterdam.
“Investments in critical digital public infrastructure such as greater connectivity and digital IDs have laid the foundation for this amazing growth, and the rise of digital payments has driven a massive increase in account ownership.”
Since 2009, Queen Maxima, a former banker and economist, has served as the UN Secretary-General’s Special Advocate for Inclusive Financing for Development, which aims to increase universal access to safe financial services.
Seventy-six percent of adults around the world now have an account either at a bank, other financial institution or with a mobile money provider, up from 68 percent in 2017 and 51 percent in 2011, the World Bank said in its Global Findex 2021 report, which was released in June.
“The Covid-19 pandemic has spurred financial inclusion – driving a major surge in digital payments amid the global expansion of formal financial services,” the Washington-based lender said in the report.
“This expansion created new economic opportunities, narrowed the gender gap in account ownership, and built resilience at the household level to better manage economic shocks.”
The pandemic led to shutdowns around the world and accelerated the transition to digital services as consumers switched to cashless payments.
Globally, digital payments are projected to nearly double to $8.26 trillion by 2024, from $4.4 billion in 2020, according to data research firm Statista.
However, FinTechs and financial services companies have a responsibility to protect consumers rather than just focusing on transaction volumes and customer acquisition, Queen Maxima told the conference, which is being held under the theme “Progressive Finance for a Changing World”.
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“The first priority is to make sure we do no harm,” she said.
“Ensuring key digital commons are in place, such as cyber security, consumer protection, data governance and digital literacy, can help marginalized communities navigate financial services more securely and in ways that really work for them.”
Beyond transaction volume and customer acquisition, can we create the rails for transformative change to help users become more financially healthy?
Queen Maxima of the Netherlands
About 22 percent of the GCC’s population is unbanked, compared with 60 percent in North Africa, according to a report by consultancy Strategy &.
Meanwhile, 79 percent of young adults in the Mena region are unbanked and 72 percent of the poorest residents could benefit from financial inclusion, the Arab Monetary Fund said in a report.
“In addition to transaction volume and customer acquisition, can we create the rails for transformative change to help users become more financially healthy?” said Queen Maxima.
This will help people better manage their day-to-day finances and access credit to plan and meet their future financial goals, she said.
“Financially healthy customers are better customers and those who offer the services can differentiate themselves from other providers,” she said.
Updated: 11 October 2022 at 04.30
