FinTech is Progressing the SDGs By Making the World More Inclusive and Prosperous

By Annie Rosenthal as part of the 2018 +SocialGood series on emerging technologies

When people think about the Global Goals, Goals 8 and 9 might not be the first ones that come to mind. However, access to decent work, economic growth, and the infrastructure needed for industry and innovation are vital to sustainable development for people and planet. FinTech, or financial technology, aims at providing financial services by making use of software and modern technology. This new technology is increasing access to essential financial services and providing new platforms for innovation and prosperity.

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Organizations including the United Nations, the World Bank, and the World Economic Forum have invested in FinTech technology, believing that it has the potential to help them in their efforts to create a better world. Read on to learn some of the ways this emerging technologies is being used to support global development.

Pushing forward the SDGs: FinTech helps individuals and organizations to create new pathways to empowerment and opportunities for all. As the UN Secretary-General’s Special Advocate for Inclusive Finance for Development states:

“ Affordable, effective, and safe financial services — savings, insurance, payments, credit, and more — can play a transformative role by fostering equitable growth and furthering vital development goals such as poverty reduction, job creation, gender equality, and food security.”

A great example of the transformative power of FinTech is the Kenyan mobile money service, M-PESA. A long-term impact study fond that the mobile money provided by M-PESA lifted as many as 194,000 households, 2% of the Kenyan population, out of poverty. Connecting populations to secure, mobile, and efficient finance services has the potential to address many of the SDGs, including ending hunger, profiting health and well-being, and reducing inequality. Learn more about FinTech and the SDGs here.

• UNDP used FinTech to fuel growth and create jobs in the Asia Pacific.
• The World Economic Forum shares ways that FinTech can utilize blockchain technology to support sustainable development.
• UN Environment conducted a study into FinTech’s potential to support the SDGs, including key steps to to supporting this direction for the technology.

Making finance more inclusive: Two billion adults, more than half of the world’s working adults, are still excluded from formal financial services. These populations are often ones that are already marginalized, including women, low-income, and hard-to-reach individuals. Being left out of the formal economy means these populations are denied processes such as the extension of savings, credit, insurance, and payment services.

For example, the World Bank’s World Development Report on Gender estimated that the income losses due to women being excluded from the world of work totals 10% to 37% of GDP across all regions. Luckily, FinTech is helping to reach and empower women and other marginalized populations, giving them entry into the formal economy and security in their transactions. Learn more about FinTech’s ability to increase inclusion, including three-pillars for advancing inclusive finance, here.

• The World Food Programme’s Virtual Farmers’ Market is an app-based e-commerce platform built to ease farmers’ and buyers’ transactions.
• UNICEF explores how FinTech can be used to support children and families worldwide.
• The United Nations Global Pulse shares data backing ways to improve access to financial services with FinTech.

How the United Nations is leading the way: The United Nations is investing in the present and future of FinTech. In addition to agencies like UNICEF, UNDP, and WFP who are instituting FinTech programs, the UN has set up several bodies to inspire and support the use of FinTech for international development. the Office of the UNSGSA champions universal access to affordable, effective, and safe financial services, collaborating with global partners to break down barriers and expand access. The UN Capital Development Fund makes public and private finance work for the poor in the world’s 47 least developed countries.

Join +SocialGood throughout April as we explore the opportunities FinTech presents to help progress the Global Goals. Share your thoughts, solutions, and ideas with #SocialGoodTech!

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