World Bank: How Countries Can Expand Access to Digital Financial Services

A new report by Ceyla Pazarbasioglu, Alfonso Garcia Mora, Mahesh Uttamchandani, Harish Natarajan, Erik Feyen, and Mathew Saal provides valuable insights for policymakers and for financial sector players seeking to expedite financial inclusion and development of digital financial services.


Digital financial services, powered by fintech, have the potential to lower costs by maximizing economies of scale, to increase the speed, security and transparency of transactions and to allow for more tailored financial services that serve the poor. This report – Digital Financial Services – describes the tools of digital finance, the successful business models and policies for encouraging their growth. It explores risks and challenges of new types of services and the legal and regulatory frameworks needed for confronting them. Finally, it includes country experiences with promoting the expansion of digital financial services and the obstacles along the way.

The current COVID-19 pandemic has amplified the urgency of utilizing fintech to keep financial systems functioning and keep people safe during this time of social distancing, falling demand, reduced input supply, tightening of credit conditions and rising uncertainty. At the same time, these new technologies must be designed and implemented carefully to manage their risks, particularly for the poor and vulnerable, so as not to exacerbate the challenges posed by this crisis. There is also an urgent need for investment in the prerequisites for developing digital financial services, such mobile broadband infrastructure—including in remote areas—expansion of digital identification, and open application programming interfaces. These investments should be complemented with the relevant legal and regulatory frameworks that can allow most people to benefit from digital financial services and ensure a competitive ecosystem.

Fintech is helping governments quickly and securely reach people with cash transfers and other forms of financial assistance and reach businesses with emergency liquidity. It is allowing people to transfer funds—including crossborder remittances—and to pay bills from their home, or in a market or store setting, with limited physical contact. But the potential is much larger than what has been achieved. The coronavirus crisis has highlighted the benefits of digital financial services in many different dimensions and its critical role in achieving the Sustainable Development Goals.

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