United Nations Secretary-General's task force issues interim report of findings on power of fintech to advance sustainable development

United Nations Development Programme (UNDP) chief Achim Steiner and Maria Ramos, recently retired chief executive of Absa Group Ltd., announced the release of Harnessing Digitalization in Financing the Sustainable Development Goals.

The report’s key takeaway: the digital revolution in financial technology (fintech) offers major opportunities to accelerate financing of the Sustainable Development Goals (SDGs) — primarily by putting more control into the hands of citizens.

The report points out that ordinary citizens are already, in fact, the world’s financiers. Collectively, the taxes they pay, the purchasing decisions they make, and their savings and investments shape the world economy. Despite this collective power, however, at the individual level, most people experience the financial system as something difficult to understand, much less to influence.

Harnessing Digitalization describes three disruptive ways that fintech can shift the center of gravity of the financial system towards the citizen: first, by increasing the quality and user-friendliness of relevant financial information; second, by reducing financial intermediation that does not add consumer value; and third, by presenting citizens with platforms for collective action, whether through crowd-funding or through consumer, employee, or shareholder actions.

There is already precedent for digitalization to advance financing of the SDGs through citizen choices.

“The issuance of more than half a trillion dollars of green and sustainable development bonds was made possible in part by the availability of affordable, reliable data thanks to digitalization. The demand is there, among citizens all over the world, to direct financing flows towards green and other sustainability-related targets. What we’re seeing now, thanks to the digital revolution, are more realistic ways to make that happen at meaningful scale,” said Mr. Steiner.

Along with the opportunities to use digital financing to advance the SDGs, Harnessing Digitalization outlines the risks. These include a deepening of the digital divide, whether by leaving behind altogether the people who lack access to necessary infrastructure or through algorithmic biases. The report also details the big unresolved issues around data privacy and the risks of fraud, money laundering, and illicit financial flows. Throughout, the report acknowledges the urgent need for robust regulatory capacity to keep pace with the speed of change.

The Task Force will incorporate feedback and reactions to the interim report after the UN General Assembly and will present the final version during Q2 2020.

Read and download the report: Harnessing Digitalization in Financing the Sustainable Development Goals. 

Original source: UNDP
Published on 26 September 2019