It’s estimated, that with the adoption of financial technology, it would be possible to increase the volume of loans to individuals and businesses by $2.1 trillion, and for governments to sensibly reduce their costs, by as much as $110 billion per year, simply by limiting the leakage in tax and spending. But the convenience is also clear for financial service providers, that could aspire to save $400 billion per year through digitization.
The possible cost reductions on payments for financial service providers are massive. Serving customers using mobile money accounts can account for 80% to 90% cost reductions compared to physical branches. In that position financial providers will be able to reach a higher number of customers, that would otherwise not be economically advantageous to serve.
India, with $689 billion of additional credit, and a new credit to GDP ratio of 34%, and Mexico with $162 billion of additional credit, and a new credit to GDP ratio of 12%, represent two countries that could benefit additionally. Taking into consideration the overall impact of fintech adoption on the GDP, the lower income countries have the largest potential, considering their current levels of financial inclusions and digital payments, with possible increased labor, productivity and investment gains.
Finance pioneers are advised, the opportunity with digital finance is remarkable.
The full report, Digital Finance For All: Powering Inclusive Growth in Emerging Economies, can be downloaded for free from this link: http://bit.ly/2drlmXp
Alessandro is Co-founder & CMO of Crowd Valley. He has worked in the fintech industry, with marketplace investing and lending, since 2011. Has built and managed digital companies with distributed teams and international partners, and gained experience with both startups and large corporations, having worked with British Telecom, Bloomberg and the Grow VC Group.
Alessandro grew up in Italy, where he graduated with a B.A. in Economics at University of Parma, before to obtain a M.S. in Finance at Regent’s University London. He studied and worked in many different cities, including Munich, Geneva, London, Barcelona and Valencia. Genuinely passionate about financial technology and innovation, he loves to spend his spare time traveling and discovering new cultures. You can find him on Twitter at @aleravanetti.