Key regulators, institutions, market players, and UN agencies launch the Dialogue on Global Digital Finance Governance, implementing one of the key recommendations of the UNSG Digital Finance Task Force, to catalyse international and corporate governance innovations to ensure BigFintechs benefit all. “Many positive developments have happened that align fintech with sustainable development, which need to be built upon.
BigFinTechs present a different challenge in that their size and scope present much greater potential for both positive and negative impacts. Strengthening the opportunities and mitigating the risks with governance innovations will ensure that BigFinTechs and fintech follow a similar path in supporting the greater good” noted Achim Steiner, cochair of the Digital Finance Task Force and UNDP Administrator.
BigFintechs are the new giants of tomorrow’s financial system, with technology driving an upsurge in growth, scale and diversification into financial services. Such BigFintechs originate from different contexts, from China’s AntGroup to Africa’s numerous mobile money companies, South East Asia’s ride hailing services, Facebook Pay, Amazon and Google in the US, Jio in India, Mercado Libre in Latin America and many more.
These platforms have positive impacts – from deepening financial inclusion to creating livelihood opportunities to enabling direct citizen action – but also bring new challenges. Negative impacts on sustainable development, intended and nonintended are numerous (research indicates that ride-hailing services create more air pollution than trips they displace, wages get suppressed as digital platforms scale, decisions made by e-commerce big players can impact hundreds of thousands of SMEs in other markets, data privacy breaches are making headlines).
“Digitalization has been the silver lining in the dark cloud of the coronavirus (COVID-19) pandemic, enabling official and personal transfers to vulnerable households and facilitating essential social services including health, education and online shopping. But with opportunities come risks, particularly of market concentration by BigFintechs.
A global discourse on these emerging risks that brings everyone to the table is imperative”, said Patrick Njoroge, the Governor of the Central Bank of Kenya.
“Good governance of Big Tech and Fintech is one of development’s cutting edge issues that will define tomorrow’s world. It requires a new geometry of actors to ensure that no one is left behind. The Dialogue on Global Digital Finance Governance offers a unique platform to convene a wide range of stakeholders, including from the Global South and bring in new perspectives to different relevant international bodies” Amb. Christian Frutiger, Assistant Director, Swiss Agency for Development and Cooperation.
Specific outcomes shall include SDGs principles into international policy and regulation on BigFintechs and advancing corporate governance innovations with BigFintechs. The Dialogue’s ambition is to catalyze in the next coming years new norms and practices for BigFintechs and digital finance can play a major role in contributing to the 2030 agenda.