Digital Finance

Increasing the reach and breadth of financial services to people who currently have limited or no access to these on a massive scale is one of IFC’s objectives. Digitalization presents tremendous opportunities and challenges—and IFC actively champions and supports responsible, innovative solutions to reach unserved and underserved populations at scale. We do this by leveraging our network of more than 1,000 financial institution clients. We help the institutions leverage technology to serve market segments that are too costly to reach with traditional brick-and-mortar banking—particularly in the poorest, most conflict-affected countries.

Advances in technology hold the promise for solving some of the key challenges to achieving full financial inclusion. Disruptive technologies and new entrants are radically changing the financial services industry forcing traditional business models to adapt and transform the economics of delivery to benefit marginalized communities. Artificial intelligence, automation, big data, distributed ledger technology, and machine learning are just a few examples of technology trends that are accelerating innovation in financial services.

New entrants, such as mobile network operators (MNOs), payment service providers (PSPs), merchant aggregators, retailers, FinTech companies, neo-banks, and super platforms, are leveraging these technologies and altering the competitive landscape for financial services. We work to reduce the cost to serve by fostering and supporting innovative and sustainable financial services providers.

We support the introduction of disruptive technology to increase competition and to demonstrate the necessity and business case for serving traditionally un(der)served segments, developing new products, and reducing inefficiencies. We provide financial institutions and financial service providers with capital and advisory services to assist them in serving the needs of clients—competitively and profitably.

 

What We Do:

IFC’s advisory and investment engagement with digital financial service providers, which started in 2007, has followed the evolution of the industry:

From 2007 to 2010, our focus was on mobile money and payments. As the industry grew there was a shift banking, from 2010 to 2014. IFC then focused more on supporting the development of business strategies leveraging technology to enable financial services as well as optimizing distribution through agents. With the rapid evolution of the industry, IFC’s support shifted to include risk management, product diversification beyond payments as well as improved consumer services. As technology evolves further and with the advent of increased computing technologies IFC is now also supporting (i) data analytics, leveraging artificial intelligence and machine learning to develop a more targeted product offering for financially excluded and underserved; (ii) process digitization to make FSPs more efficient and enhance customer experience; and (iii) increased consumer protection both with regard to fair and transparent products offers and data protection. 

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