Press Conference: The Future of Global Fintech
18 Jan 2024 10:00h - 10:30h
Event report
The fintech industry is proving resilient and expanding financial services to traditionally underserved consumers and businesses, according to new research from the World Economic Forum in collaboration with the Cambridge Centre for Alternative Finance at the University of Cambridge Judge Business School.
This press conference highlights ways in which the sector impacts the economy and society and identifies areas where public and private sector actors can take action to help strengthen the industry.
More info: WEF 2024
Knowledge Graph of Debate
Session report
Full session report
Vince Eswara
Fintech is revolutionising the way businesses and consumers interact in the digital ecosystem. One of the main advantages of fintech is the value it provides to both consumers and businesses. SMEs, in particular, have experienced remarkable growth in their business, with an average increase of 30% attributed to the digital ecosystem. This growth can be primarily attributed to the ability of fintech to facilitate digital payments, allowing consumers to transact with any merchant, offline or online.
Furthermore, embracing fintech presents numerous opportunities for growth. A compelling example of this can be seen with Dana Indonesia, whose growth surpassed 100% even during the pandemic. This staggering growth can be attributed to the transparency and ability of fintech to reduce operational costs, allowing SMEs to track their income better.
The introduction of digital apps for financial services has also played a crucial role in transforming the way consumers interact with financial products. These apps not only provide a seamless and convenient interface for users but also empower them through access to lending, insurance, and investment opportunities. Consumers are effectively educated on these subjects, leading to improved financial literacy and informed decision-making.
Moreover, fintech has significantly lowered the barrier of entry for various financial services. The ability to start investing with as little as one-tenth of a pound enables individuals to begin their financial journey, gradually accessing more sophisticated products as they gain experience. This inclusive approach to finance aligns with the goal of reducing inequalities and promoting financial inclusion.
Another noteworthy aspect of fintech is the community-building element it fosters. As the usage of digital apps increases, communities are strengthened, and consumers educate one another on the benefits of the services. This peer learning dynamic enhances the overall user experience and contributes to a stronger and more supportive community.
Additionally, fintech drives innovation within companies. Encouraged by the advancements made possible through fintech, more and more companies are innovating their products and services. This innovation not only enhances the overall user experience but also contributes to the growth and development of the fintech industry.
In conclusion, fintech is revolutionising the financial landscape by providing value for consumers and businesses alike. SMEs are experiencing remarkable growth, and embracing fintech offers various opportunities for further expansion. The introduction of digital apps for financial services has transformed the way consumers access and engage with financial products. Fintech has also significantly decreased the barrier of entry, promoting inclusive finance through micro-transactions, micro-lending, micro-investment, and micro-insurance. Moreover, fintech promotes community-building and peer learning, and it drives innovation within companies. Overall, fintech accelerates the growth of the economy by improving efficiency and accessibility in financial services.
Brian Zhang
The global fintech industry is showing resilience and strength, with customer growth averaging over 50% across all industry sectors and regions. This growth is largely driven by consumer demand, which is cited as a key factor supporting the industry. Fintech companies are effectively meeting the needs and expectations of consumers, leading to a significant increase in their customer base.
However, several inhibiting factors may hinder the growth of the global fintech industry. These include challenging microeconomic conditions and a difficult funding environment. Over 56% of surveyed fintech companies identified the microeconomic condition as a hindrance to growth. Additionally, 40% of the surveyed fintechs regarded the funding environment as a barrier. Factors such as higher inflation rates and higher interest rates contribute to these challenging microeconomic conditions, which in turn affect the growth potential of the fintech industry.
Nevertheless, fintech holds promise and has the potential to address the issue of financial access for unbanked and underbanked populations, as well as for small and medium-sized enterprises (SMEs), particularly in emerging markets and developing countries. This has positive implications for achieving the Sustainable Development Goals (SDGs) related to poverty reduction, gender equality, and reduced inequalities. A global fintech survey conducted by the Cambridge Center for Alternative Finance highlighted the potential impact of fintech on financial access. Fintech offers innovative solutions and services that promote financial inclusion and empowerment of underserved populations.
Furthermore, fintech and digital financial services can help bridge the persistent gap in SME financing. These technologies provide alternative channels for raising capital beyond traditional banking methods, making it more accessible for SMEs to secure the funds they need. Fintech companies also leverage diverse data forms to make credit decisions, such as invoice trading or invoice factoring, thereby enabling them to provide SMEs with the necessary financial support, fostering their growth and economic development.
In addition to SMEs, fintech is making a significant impact on micro-businesses and smaller enterprises globally. These businesses often require smaller loans, and fintech platforms are capable of catering to their specific needs. Fintech companies leverage various data forms to make robust, accurate, and timely credit decisions. This enables them to effectively serve the micro-business sector and contribute to their growth.
In conclusion, the global fintech industry is experiencing substantial growth driven by consumer demand. However, various inhibiting factors such as challenging microeconomic conditions and a difficult funding environment pose challenges to the industry's growth potential. Nonetheless, fintech has the potential to enhance financial access for underserved populations, including unbanked and underbanked individuals and SMEs. Fintech companies utilize innovative technologies and alternative data sources to address persistent gaps in SME financing while also making a positive impact on micro-businesses. These fintech advancements contribute to achieving various SDGs and hold transformative potential in driving economic growth and reducing inequalities.
Drew Propson
The analysis reveals several key insights regarding the relationship between fintechs and regulators. It shows that progress is being made in this area, as 63% of fintechs rate their regulatory environment as adequate. This suggests that there is a growing understanding and cooperation between fintechs and regulators, which is crucial for the development and success of the fintech industry.
However, there are areas in which improvement is needed. According to the analysis, 27% of fintechs rated the registration and compliance process poorly. This indicates that there are challenges and burdens associated with the cost and complexity of compliance registration. Streamlining and simplifying this process could support the growth of fintechs and encourage greater innovation in the industry.
Another area of concern is the coordination among regulators. The analysis reveals that 27% of fintechs rated the coordination among multiple regulators as poor. This lack of coordination could hinder the growth and development of fintechs, as it may create inconsistencies and uncertainties in regulatory requirements. Enhancing coordination among regulators could lead to a more supportive environment for fintechs to thrive.
One significant contribution of fintechs is their role in promoting financial inclusion for traditionally underserved communities. The analysis states that 40% of fintechs' customer base consists of low-income individuals, 40% are women, and 30% come from rural populations. This highlights the importance of fintechs in reaching and serving those who have been excluded from traditional financial services. By leveraging technology and innovative solutions, fintechs are bridging the gap and providing financial access to underserved communities.
When examining fintech regulation across regions, the analysis suggests that there are no striking differences among them. However, it notes that Sub-Saharan Africa and the Asia Pacific region perform relatively well in terms of fintech regulation. This indicates that these regions have developed frameworks and regulatory environments that are supportive of fintech innovation and growth. Other regions can learn from their approaches to foster a more conducive environment for fintech development.
The analysis also highlights the benefits of digitisation in financial services. It emphasises the importance of convenience and safety, as digital transactions eliminate the need to carry physical cash and reduce associated risks. Additionally, digitisation allows individuals to prove their creditworthiness through a digital footprint, which opens up opportunities for the expansion of products and services.
Overall, the analysis suggests that the relationship between fintechs and regulators is evolving positively, but there are areas that require attention and improvement. By addressing the challenges associated with compliance registration and strengthening coordination among regulators, the fintech industry can thrive and further contribute to financial inclusion and economic growth. The digitisation of financial services offers immense potential for convenience, safety, and expanding access to financial products and services.
Naoko Tochibayashi
The World Economic Forum, in collaboration with the Cambridge Center for Alternative Finance, has released a comprehensive report on the current state of the global fintech industry. This report is the result of a global survey conducted across six regions, involving over 200 fintech companies from five retail-facing industry verticals. Its main objective is to promote responsible growth within the fintech sector.
The report reveals a neutral sentiment regarding the findings and conclusions drawn from the survey. It aims to serve as a valuable resource for industry stakeholders, policymakers, and regulators to further develop and advance the fintech industry responsibly.
One significant aspect of the report is the positive outlook expressed by Naoko Tachibayashi, the communications lead at the World Economic Forum, regarding its potential impact on traditionally underserved consumers and businesses within the fintech industry. Tachibayashi emphasizes the report's importance in unveiling insights into the evolving nature of the fintech industry, particularly its potential to drive decent work and economic growth while reducing inequalities.
The report provides noteworthy supporting facts, including the global reach of the survey and the involvement of various retail-facing industry verticals. This ensures that the findings are representative and diverse. Furthermore, the report aims to offer a holistic understanding of the fintech landscape, considering both the opportunities and challenges faced by the industry.
In conclusion, the World Economic Forum and the Cambridge Center for Alternative Finance have published a detailed report on the state of the global fintech industry. The report endeavors to promote responsible growth in the sector and provides insights into its evolution. Naoko Tachibayashi's positive outlook underscores the potential impact of the report on traditionally underserved consumers and businesses. Overall, the report serves as a significant resource for industry stakeholders and policymakers to inform future decisions and initiatives in the fintech industry.
John Rwangombwa
Fintech has been a key driver of Rwanda's development, leading to positive impacts on various aspects of society. The growth of fintech in Rwanda is evident from the significant increase in digital transactions as a percentage of the country's GDP, which has risen from 0.3% in 2011 to an impressive 135%. This shift towards digital financial services has contributed to increased financial inclusion, as individuals previously excluded from the financial sector now have access to digital loans, with 77% of personal loans being conducted digitally.
The digitization of government services in Rwanda has also had a profound impact, reducing the time it takes to receive government services from weeks to just hours or minutes. This has been made possible by the Rwandan government's commitment to embracing technology and innovation, with all government services successfully transitioning to digital platforms. Additionally, a dedicated department has been established to drive financial sector development and financial inclusion, emphasizing the government's proactive approach in promoting fintech.
The central bank in Rwanda has played a crucial role in supporting fintech innovators by establishing a unit focused on collaborating with and supporting them. The central bank has also created a sandbox environment for innovators to test their products in a live setting and receive guidance and support. These initiatives highlight the central bank's commitment to fostering innovation in the financial sector.
The integration of digital financial services has significantly impacted financial inclusion in Rwanda, with the number of people formally accessing financial services increasing from 21% to 77%. Digital channels have also enabled more Rwandans to save for their future, with the number of individuals able to save for their late age increasing from 570,000 to 3.6 million.
Fintech not only promotes financial inclusion but also offers convenience and time-saving benefits. Financial transactions can now be conveniently conducted from one's desk, saving time and reducing costs. SMEs in Rwanda have also benefited from fintech, as it allows them to build credit history and gain trust from financial institutions.
Overall, fintech has played a pivotal role in driving Rwanda's development, fostering economic growth, and improving financial inclusion. The Rwandan government and the central bank have shown proactive support for fintech, creating an enabling environment for its growth. As Rwanda continues to embrace fintech, it is poised to further harness the benefits of digital finance and drive inclusive economic development.
Speakers
BZ
Brian Zhang
Speech speed
132 words per minute
Speech length
831 words
Speech time
377 secs
DP
Drew Propson
Speech speed
200 words per minute
Speech length
991 words
Speech time
298 secs
JR
John Rwangombwa
Speech speed
139 words per minute
Speech length
1334 words
Speech time
576 secs
NT
Naoko Tochibayashi
Speech speed
149 words per minute
Speech length
653 words
Speech time
262 secs
VE
Vince Eswara
Speech speed
167 words per minute
Speech length
1429 words
Speech time
514 secs
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