Publication Archives - Responsible Finance Forum

FINTECH NOTES: THE RISE OF DIGITAL MONEY

15 Aug 2019

This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.

Originally published on IMF’s website.

BASIC BUSINESS MODELS FOR BANKS PROVIDING DIGITAL FINANCIAL SERVICES IN AFRICA

15 Aug 2019

Digital Financial Services have progressed rapidly since the first mobile-money services in East Africa a decade ago. Their early success in Kenya and Tanzania sent telecom firms, banks, technology firms, and development institutions scrambling to launch similar services. Yet many or most of these new services found only limited success of their own. The process delivered valuable lessons to the industry, however, including insights about scale, effective engagement models, the importance of adopting new technologies and rethinking corporate cultures, and the need for new digital financial services and products.

THE ROLE OF DIGITAL FINANCIAL INCLUSION IN PREPARING FOR OLDER AGE AND RETIREMENT

12 Aug 2019

As populations age and birth rates decline in many parts of the world, digital solutions have an important role to play in ensuring financial well-being for older adults. Globally, the number of people aged 60 years or over has more than doubled since 1980, and the share of older adults is projected to double again by 2050.

This paper, jointly released by the Better Than Cash Alliance and the World Bank, summarizes and analyzes the financial challenges faced by older adults. It outlines ways that digital technology can alleviate these hardships and shows worldwide variation in the share of adults who save for old age and have pensions. The paper finds that the proportion of adults who have digital technology and use digital financial services dwindles with age, potentially in ways that are detrimental to their financial well-being.

In the G20 Fukuoka policy priorities on aging and financial inclusion, low digital capability was highlighted as a leading cause of financial exclusion among older adults.

This report aims to provide insights, particularly to policymakers, financial and mobile service providers, insurers and business associations interested in developing and distributing financial products to help people of all ages prepare for and manage old age. The paper draws on data from the World Bank’s Global Findex database, the Gallup World Poll and secondary studies, and should be read in conjunction with the G20’s Fukuoka policy priorities.

Above originally published on BTCA’s website.

2019 ACCENTURE GLOBAL FINANCIAL SERVICES CONSUMER STUDY

20 May 2019

In brief

Our consumer study, one of the largest of its kind, offers banks and insurers deep insights into their customers’ attitudes and preferences.
Banking and insurance customers are more willing than ever to share data—if their needs are met in return.
We identified four consumer personas that vary based on how they value banking and insurance offers and services.

Personalization: The expected prize for consumers’ data

What do banking and insurance consumers most want from their providers? According to our study, they value integrated propositions and tailored offerings designed to meet their core needs. They like seamless integration across channels. And they want all of it to be trustworthy. The best news? More than three in four consumers are willing to share their data in return for these personalized services.

The 2019 Accenture Global Financial Services Consumer Study surveyed 47,000 banking and insurance customers across 28 markets in Asia-Pacific, Europe, Latin America, Middle East and Africa, and North America to gain insight into what consumers prioritize. It builds on our first biennial study in 2017 and is one of the largest of its kind. Our survey identified values and preferences among financial consumers. We sought to understand what brings varying consumers together, and what sets them apart.

FINTECH: A GAME CHANGER FOR FINANCIAL INCLUSION?

20 May 2019

Financial technology (fintech) has taken centre stage in the financial inclusion industry. Many believe that low cost, far-reaching digital solutions hold the key to reach out to the 1.7 billion people worldwide who are still excluded from formal financial services. Not only are fintech initiatives mushrooming, the number of investment activities is also increasing, including those by impact investors such as Triodos Investment Management.

Exploring the promise and the pitfalls

In the publication ‘Fintech: a game changer for financial inclusion?’ Triodos explores the promise and the pitfalls of fintech for the financial inclusion industry. They share the results of a survey conducted with their investees and discuss what fintech means for them as an investor. They also shed light on their fintech investment approach highlighting some of their fintech investments.

Deepening the impact of financial inclusion

Caspar Sprokel, head of equity investments: “Fintech is here to stay and as an investor we have developed an investment approach to contribute in a sustainable, responsible way. To fintech is a means. The aim is not to invest in fintech for the sake of fintech, but to deepen the impact of financial inclusion.”

This publication was originally posted on Triodos’ website: ‘Fintech: a game changer for financial inclusion?’

THE CASE FOR RESPONSIBLE INVESTING IN DIGITAL FINANCIAL SERVICES (EM COMPASS NOTE 67)

17 Apr 2019

Together with private sector investors, IFC has been leading a global effort to develop new guidelines for responsible investing in digital finance. These guidelines leverage IFC’s significant experience with the Equator Principles and responsible investing in micro, small, and medium enterprises (MSMEs) by focusing on strengthening governance, risk management, consumer protection, and financial well-being for the unbanked and underserved—as well as IFC’s experience as advisor and investor in the digital finance space.

Originally posted on IFC’s website.

THE 2019 FINACCESS HOUSEHOLD SURVEY

09 Apr 2019

The 2019 FinAccess household survey is the fifth in a series of surveys that measure drivers and usage of financial services in Kenya. The 2019 report was officially launched on April 3rd 2019. The four previous surveys of 2006, 2009, 2013 and 2016 have shown that Kenya has made significant progress in fostering financial inclusion, with the latest survey providing a thirteen year perspective on Kenya’s financial landscape.

Formal financial inclusion has risen to 82.9 percent, up from 26.7 percent in 2006, while complete exclusion has narrowed to 11.0 percent from 41.3 percent in 2006. The disparities in financial access between rich and poor, men and women, and rural and urban areas have also declined remarkably. Key drivers of these changes include: the growth of mobile money, government initiatives and support, and developments in information and communications technology (ICT).

Originally posted on FSD Kenya’s site.

CREATING IMPACT—THE PROMISE OF IMPACT INVESTING

09 Apr 2019

Investors’ appetite for impact investing—in which they seek to generate positive impact for society alongside strong financial returns—could total as much as $26 trillion, according to the report Creating Impact: The Promise of Impact Investing.

The report is the most comprehensive assessment so far of the potential global market for impact investing. It estimates that as much as $269 trillion—the financial assets held by institutions and households across the world—is potentially available for investment. Channeling just 10 percent of this amount into projects focused on improving social and environmental outcomes would go a long way toward providing the necessary funding for the world to achieve the Sustainable Development Goals and to shift to a lower-carbon future.

The report estimates that in public markets involving stocks and bonds, investor appetite could be as high as $21 trillion. An additional $5 trillion could come from private equity, non-sovereign debt, and venture capital. Turning this appetite into actual investments will depend on the creation of investment opportunities and investment vehicles that enable investors to pursue impact and financial returns in ways that are sustainable.

Originally posted on IFC’s website.

GLOBAL PERSPECTIVES ON RESPONSIBLE INVESTING

20 Mar 2019

Over the course of the past year, Aon has noted a dramatic upsurge in the number of institutional clients who are exploring or implementing responsible investing (“RI”) initiatives. Just a few years ago, institutional investors with RI programs were few and far between. Today, Aon has many clients in various stages of RI program development, from educational initiatives for investment staff and boards to full on deployment of RI policies and procedures. To stay current with the evolving landscape, they launched a global responsible investment survey to capture current attitudes towards and developments in investors’ RI thinking, and share those results in this paper.

Originally posted on Aon’s website.

REINVENTING BUSINESS THROUGH DISRUPTIVE TECHNOLOGIES

18 Mar 2019

Disruptive technologies are transforming business models in Emerging Markets. This report examines eight sectors – Power, Transport, Water, Digital Infrastructure, Manufacturing, Agribusiness, Education, and FinTech – and also discusses the impact of technology on gender, climate and other broader thematic topics.