The Promise of Fintech: Financial Inclusion in the Post COVID-19 Era
Technology is changing the landscape of the financial sector, increasing access to financial services in profound ways. These changes have been in motion for several years, affecting nearly all countries in the world. During the COVID-19 pandemic, technology has created new opportunities for digital financial services to accelerate and enhance financial inclusion, amid social distancing and containment measures. At the same time, the risks emerging prior to COVID-19, as digital financial services developed, are becoming even more relevant.
Introducing a new index of digital financial inclusion, this paper shows that digital finance is increasing financial inclusion and is associated with higher GDP growth. These findings suggest that digital financial inclusion could play an important role in mitigating the economic and social impact of the ongoing COVID-19 crisis.