Financial institutions are under pressure. Strategic, technological, and competitive shifts are forcing them to devise innovative strategies to adapt to change, attract and keep clients, and remain relevant.
Across markets, new technologies are transforming the economics of financial service delivery, as well as customers’ experiences and expectations. The rise of “superplatforms”—internet giants such as Apple, Google, Facebook, and Amazon—in financial services, partnerships between banks and fintech companies, blockchain, big data, and automation all are enabling new and established providers to reach more of the underbanked.
The challenges—and opportunities—for financial institutions are especially acute in developing countries, where 1.7 billion adults still don’t have access to a basic account, and formal micro, small, and medium-size enterprises (MSMEs) face an estimated $5.2 trillion financing gap.
In response to these trends, IFC and the Boulder Institute delivered the Fourth Annual Back to Boulder: Enhancing Strategic Relevance in Microfinance Program last week for 60 C-Suite leaders and Board members from across the financial-inclusion space. International leaders, including Prudential Insurance, Ant Financial, Baobab, Mastercard, and PayPal, joined sessions and shared expertise on digital transformation and the challenge of remaining competitive in today’s dynamic landscape.
Martin Holtmann, Manager of MSME and Digital Finance in IFC’s Financial Institutions Group, emphasized that “true digital transformation is fundamentally shifting the way you think—reexamining who you serve and why.”
Since its launch in 2016, the IFC-Boulder program has helped connect and strengthen the current generation of financial sector leaders. Today, they represent nearly 300 CEOs, Board members, and senior managers who are positioning themselves to successfully provide products that serve a wider segment of the population and support a broader set of financial goals. Many attendees have played critical roles in advancing access to finance globally. This year’s participating institutions had a combined outreach of 25 million clients in 30 markets.
“Micro and SME business models are blurring, new entrants like superplatforms, MNOs, and fintechs are increasingly digital, and financial service providers are partnering to access new technology and skills,” said Momina Aijazuddin, Global Head of Microfinance. “This provides an opportunity for traditional players to leverage technology in partnerships with newer players.”.
The program fits well within the World Bank Group’s mission. IFC’s work in the sector is guided by our determination to create markets and mobilize private sector solutions where they are needed most. IFC’s commitment to scaling financial inclusion entails diversified products and services for customers to promote financial health. Over 20 years, IFC has made more than 600 microfinance investments totaling more than $5.2 billion and has undertaken some 290 advisory projects in 95 countries. In 2018, our partners reached more than 50 million microenterprises and nearly 8 million SME businesses.
Alongside our partners, we must continue to strengthen strategic resilience to advance progress toward full financial inclusion by 2030.
During the week, IFC COO Stephanie von Friedeburg issued a call to action to the event’s participants.
“It’s a big task,” she told the crowd. “We need to leverage each other’s experience in managing risks, developing strategies to remain competitive, and harnessing the power of technology to reach more of the un-and-underbanked in a responsible way.”