Coming together at Marina Bay Sands Singapore, a distinguished panel of speakers discussed the important issue of “Fintech for Sustainable Development Goals” at the Responsible Business Forum on Sustainable Development 2017. The goals set out by the UN aim to promote greater financial inclusion.
Fintech covers a wide range of technologies and applications, from mobile payment platforms to high-frequency trading, crowdfunding to virtual currencies and blockchain. Disruptive innovations in fintech are predicted to threaten the viability of today’s financial sector business models, and indeed the effectiveness of current policies, regulations and norms that have shaped modern finance.
There are a number of ways in which it aims to achieve this, including by: 1) reducing payment costs and increasing access to capital; 2) collecting, analysing and sharing information on the financial system to support improved economic decision making, regulation and risk management; 3) providing financial markets with a level playing field and market integrity to support long-term economic investments that align with the sustainable development agenda; and 4) mobilising domestic savings at scales that will support long-term economic stability.
Moderated by Gina Heng, Co-Founder and CEO of Marvelstone Group, panelists included:
- Kay Lot, PiPay, Cambodia
- Audrey Tan, Co-founder, Angels of Impact
- Joseph Thompson, Chief Executive Officer & Co-Founder, AID:Tech
- Joe Seunghyun Cho, Chief Executive Officer, LATTICE80
Below, we include excerpts from the conversation on how can fintech accelerate the achievement of sustainable development goals;:
Joe Seunghyun Cho, Chief Executive Officer, LATTICE80
- Our mandate at LATTICE80 includes raising awareness of fintech among the public. Fintech means different things in emerging markets versus developed markets. Everyone should benefit, even though banks and corporates sometimes see it as a trap. We need to educate the existing market stakeholders that it can be complementary.
- Much of what the fund managers have traditionally done can be replicated by robo and AI, but that doesn’t mean they will all be replaced. Instead, it will allow them to service a larger pool of customers more effectively (especially retail customers with small deposit accounts).
- Every component in the SDGs is already top of mind of many fintech entrepreneurs. The UN’s goals are complementary to the positive change most fintech are trying to bring. Partnerships between private and public sectors will be key.
- My experience volunteering in Nepal in the early 2000’s showed be how things are changing. The ODAs used to be around infrastructure, but now there is no longer a need to spend billions on building that – instead mobile and Internet is making new services affordable. It can also be easily commercialised to satisfy investors and other stakeholders.
- Cryptoeconomics is changing the game. Early stage startups that were coming to me two years ago for $100k have gone on to raise millions from ICOs. This echoes Audrey’s comments on traditional funding sources losing their relevance. Increasingly we are seeing regulators and legal frameworks catching up to accommodate the crypto industry.
Kay Lot, PiPay, Cambodia
- It’s taken a long time to engage with the banking sector. We’ve heard about how fintech is going to eat their lunch for a long time. We had to carve out a position as being their to complement them.
- Everyone should benefit from the new technologies of fintech. Financial literacy is needed in emerging markets. It’s also worth making clear that there are sustainable ways to serve the bottom end of the market. By making it affordable, they are able to participate in the ecosystem.
- I see numbers thrown around in discussions on SDGs – so many trillions of dollars in opportunity and support – but for the small players in emerging markets it seems like a different world. We are playing on such small levels by comparison. I hope the SDGs can play a role as a custodian to bridge this chasm.
- In the longer term, there is no question that the role of fintech will be primarily around the democratisation of fintech. But there will still be some left behind who need to be brought along through improving financial literacy. These people need to be engaged in very simple language that they understand.
- Innovation has to be brought down to the lowest common denominator. In Cambodia we still have 80 per cent unbanked. Getting them to move away from cash transactions takes a long time. Once this segment of the population becomes a little more savvy, we will see huge positive shifts.
Audrey Tan, Angels of Impact
- We use blockchain to move money across the region to bring down costs of the process, especially from one developed market like Singapore to a less developed one like Cambodia.
- Many financial products today are made for people in developed markets, but many fintech tools are being developed for poorer or unbanked populations in emerging markets. Fintech should put these poorer people at the centre of fintech development.
- The next few years will continue to raise levels of democratisation of access across the finance industry. There is an opportunity for successful individuals from emerging markets to help raise money for impact investing. Many traditional funding sources will lose their relevance if they do not change with the times. There is too much concentration of wealth and funding pools.
- Good intentions alone is not enough. We need to listen and be mindful of how to empower local heroes to bring the changes internally within their communities.
- Value-based decision making is being empowered by fintech and forums supported by the likes of the UN. Financing of women as social entrepreneurs is just one example. We need more empathy.
Joseph Thompson, Chief Executive Officer & Co-Founder, AID:Tech
- We were the first company to use blockchain technology to deliver aid to Syrian refugees. Our efforts have been recognised by awards from Mastercard, Citibank, and others.
- We need a paradigm shift wherein governments are creating the right incentives for fintechs to solve the SDG problems through partnerships. Many corporates are still not aware of what the SGGs are. HR and CS teams need to do more to educate executives within corporates about the new shifts.
- I’ve seen fintech companies trying to offer social impact solutions, but investors and potential partners move to slowly to adopt the opportunities – even when it is being offered for free. The UN and Red Cross have the chance to help get things right as we move forward by providing more support and raising awareness. They can add credibility.
- In 2029 where does that leave humans? Tech and algorithms will be very strong admittedly, but there’s still a need for people in government and policy making to be heavily involved, steering the ship, and making important decisions.