The Role of Technology and Financial Inclusion

The role of technology has become increasingly crucial in the recent years. A recent McKinsey report projected the revenue generated from fintech to grow almost three times faster compared to traditional banking sector between 2022 and 2028. Technology helps in efficient screening and monitoring of borrowers, reduces transaction costs, helps enhancing financial inclusion and promotes economic growth. Globally although 79% of adults of adults now have an account at a financial institution including mobile money providers, yet a significant proportion of the world population still remains unbanked. While technology has led to increased financial inclusion, there are also considerable risks involved. My recently published book co-authored with Prof Tapan Sarker, University of Southern Queensland titled The Financing of Sustainable Development Goals (SDGs): Challenges and Opportunities cautions on the responsible use of technology to achieve SDGs. Unfettered use of these disruptive technologies can cause significant threats and jeopardise the achievements of SDGs and impact particularly the vulnerable and the poor segment in low-income countries. Our findings show that while several benefits of fintech and its potential to increase financial inclusion have been well acknowledged in the literature, there are also several concerns on regulation, trust, financial instability, fintech product design and its ease of usage, digital divide especially gender digital divide, financial and digital literacy, and risks to the vulnerable population.