Why FinTech is the Solution the Global Economy Needs to Thrive
After 2020 and COVID-19, our world entered a new era. An era that brought forward a number of urgent global challenges that might have been present beforehand, but were especially enforced by the pandemic. I want to specifically cast a spotlight on three of these: Rising inequality, demographic shifts, and climate change.
Despite the fact that some experts still believe that worldwide digitalisation might carry new risks for the economy and fear the unknown future, I believe that we would be blind not to acknowledge the value of modern financial technological solutions on our journey to tackle these three challenges.
Inclusivity and equality are fundamental cornerstones for a thriving economy and FinTech companies have designed a bridge so that we can reach them sooner. Thanks to new innovative financial solutions emerging, developing markets can overcome existing financial inclusion obstacles like distance, documentation, and lack of funds, and create a world of equal opportunities for their populations. By working together with FinTech companies, governments can influence and significantly diminish the percentage of unbanked people, essentially making the first but very important step towards solving existential issues such as economic growth, employment, poverty, and income equality in both developed and developing countries.
We can already see signs of these changes. According to the Global Findex Survey in 2021 after the massive digitalisation caused by the pandemic, two-thirds of adults worldwide now make or receive a digital payment. In developing countries, 40% of people who made a digital payment from their account (to a merchant or for a utility service) did so for the very first time since the start of the pandemic. The gender gap in account ownership has also shrunk for the first time, narrowing from 9 to 6 percent in developing countries. Yet, there is still a lot of work to do with roughly 1.7 billion people worldwide who remain unbanked.
The demographic shift is another big challenge shaking up our world that FinTechs can help with. With more developed economies’ societies rapidly aging and developing countries facing significant changes in their populations’ age structures, there isn’t a more urgent time than now for governments worldwide to join forces with financial technology companies to bridge the gaps in the provision of financial services and to stabilise economies.
While in emerging countries a younger, tech-savvy population rises – one that’s ready to embrace existing challenges by easily adapting to new technological trends and developments, FinTechs are mostly needed to support their hunger for freedom and new discoveries. Upper-middle-income and high-income countries, where effective labor is growing much more slowly, aging is leading to a declining support ratio and the GDP is likely to grow more slowly as a result of demographic change. They will require the support of new financial solutions to maintain stability and equal financial opportunities for their nations.
Finally, there’s climate change – not just a challenge but a horrifying threat to the world as we know it. IPCC Sixth Assessment Report has continued to shed light on the fact that the changes in the physical climate system have adversely affected natural and human systems around the world, contributing to a loss and degradation of ecosystems, reduced water and food security, additional mortality, human migration, and increased inequality. Today, almost two-thirds of people across 50 countries view climate change as an emergency compared to just over half across 23 countries in 2013. In late 2019, protests calling for strengthened climate action reached an unprecedented level of over 6,000 events in 185 countries, with a reported estimate of 7.6 million participants.
And yet again, financial technology companies have risen to the challenge. A new industry division called “climate FinTech” was born, focused on leveraging Big Data, AI, and blockchain technology to help speed up the “greening” of capital flows and help people globally become more climate-conscious asset owners.
FinTech companies worldwide are trying to make a difference by either enabling customers to invest savings into causes that are revolutionising access to clean energy, water, sustainable food, etc. or offering to plant trees for every transaction, instead of more traditional rewards such as cash back, discounts or travel perks. Even blockchain, which is still quite a controversial technology climate-wise, is today considered a vital enabler in tracking carbon emissions and consumption and is even used to track responsible tuna sourcing.
To summarise, I believe that FinTech should be viewed as a force of reformation, which stimulates growth, development, inclusivity, and economic stability. We must not fear the innovative progress, but rather embrace it and leverage it to fill the existing gaps that threaten our physical and financial environments. By forming a partnership between nations and financial technology companies and working together, we can bring significant change to the world and truly prepare ourselves and the new generations for tomorrow.
About Irene Skrynova
Irene Skrynova is Chief Customer Officer at Unlimint. She started her career in finance by working with projects developing white label trading platforms and cryptocurrencies. Her current role is to overlook all client interactions from leads to portfolio, as Unlimint offers a range of payment solutions for customers to be able to accept payment from anywhere in the world as needed. She boasts diverse international experience from PR and marketing roles to crypto and business development in recent years, which enables her to understand platforms as well as the startup landscape which allows her to offer a fresh perspective and professional wisdom.
Unlimint is an all-in-one future-focused FinTech solution that provides fast-growing, innovative businesses with advanced payment capabilities through an evolving financial interface. The company embraces a wide range of financial platforms to allow start-ups and entrepreneurs to expand globally and provide them with a seamless digital finance management experience. Headquartered in London, Unlimint has over 400 employees across 16 offices and five continents, including Frankfurt, Singapore, São Paulo, Hong Kong, and Mexico.
For further information, please visit: https://www.unlimint.com/