Keywords: Digital Financial Services, Global Economy, COVID-19, Financial Inclusion, Women, SMEs, Youth, World Bank Group, Financial Innovation
As the global economy wrestles with the COVID-19 pandemic, digital financial services are emerging as powerful tools to mitigate the crisis’s economic impact. This article explores how digital financial services play a crucial role in tackling the current economic challenges and propelling economic recovery.
The Role of Digital Financial Services Amid COVID-19
The recently published “Global Economic Outlook” predicts that the global economy could contract by more than 5% in 2020 due to the pandemic, plunging millions into poverty and making global recovery seem a distant prospect. However, the crisis has sparked several incentives for economic transformation towards digital business models, including the expanded use of digital financial services.
Before the pandemic, financial inclusion through digital means was a developmental priority. Now, it’s not only an indispensable part of short-term relief efforts but also a central element of widespread and sustainable recovery efforts. The challenge lies in accelerating digital financial services while navigating the hurdles and mitigating the associated risks.
This year, the Global Partnership for Financial Inclusion (GPFI) developed the “Advanced Policy Guide for Digital Financial Inclusion of Youth, Women, and SMEs.” This guide, approved at the recent G20 Finance Ministers (virtual) meeting, provides a roadmap for improving access to financial services for these underserved groups.
In this age of uncertainty, the ability to leverage digital financial services is more than just a coping mechanism—it’s a fundamental driver of economic recovery and future resilience. Amid the pandemic, two themes stand out in our digital-first world: the importance of accessible digital technology and infrastructure, and the opportunities to accelerate financial inclusion through mass payments.
I invite you, the readers, to share your thoughts on these developments. How else can digital financial services shape our global economic recovery? Your insights are invaluable. Please leave your comments below, and let’s foster a meaningful dialogue around these pressing financial trends.