The Covid-19 epidemic has hastened the adoption of digital finance systems as the principal means of transaction execution. As a result, it’s become increasingly crucial to ensure that all consumers and small businesses have access to critical technologies. With this in mind, the Global Future Council on Responsive Financial Systems of the World Economic Forum put forth three strategies to harness innovation and impact public policy to enable financial inclusion.
Financial technology provides new opportunities for banks and start-ups to provide a wider range of services that are personalized to the demands of their consumers. While certain markets have made significant strides in financial inclusion, the progress has been unequal, and there is much to be learned around the world. This digital revolution offers several opportunities to stakeholders across the financial system.
The digital ID as a driving force for our digital future
Fintech, or financial technology, is filling a void in the traditional banking system’s financial services industry. Digital identity systems for individuals and businesses open up a world of possibilities for digitally delivering financial services that are currently unavailable to nearly 1.7 billion adults throughout the world. A regulatory framework that is tailored to the needs of digital financial services might encourage growth and lead to continuing advancements in digital banking and payments.
Supporting the revival of small and medium-sized businesses
Small and Medium-sized Enterprises (SMEs) are the bedrock of the global economy and the backbone of local communities. While the Covid-19 outbreak has wreaked havoc on small businesses, digital tools can help them bounce back. Financial institutions’ alternative credit assessments provide SMEs with new ways to obtain much-needed funding. Financial institutions could help SMEs by giving them access to digital platforms that allow them to reach out to clients across many channels and provide a seamless cross-border payment system.
Increasing the availability of digital investing services
In China, the Covid-19 pandemic is acting as a game-changer, causing investors’ behavior to alter for the better once they’ve experienced the convenience and efficiency of digital financial services. When compared to traditional wealth management options, the digital wealth management model provides consumers with additional benefits such as lower transaction fees and a more tailored customer experience thanks to big data and other technologies. As individuals become more sophisticated in their use of investment products, digital service providers must develop more imaginative ways to educate their customers about the products they are offering and provide them with ongoing education.