Digitization, Digital Platforms, and Financial Inclusion

- The Rise of Digital Platforms

Advances in digital technology have expanded awareness of the benefits of conducting financial transactions online or using mobile devices. At the same time, digital advancements have brought financial services to billions of previously unserved and underserved consumers around the world, especially in less developed economies. 

Based on current trends, digital platforms will be the preferred and dominant business model for banks and financial institutions in the future. Digital platforms provide consumers and small businesses with the ability to connect with financial and other service providers through online or mobile channels as an integral part of their daily activities. We are entering a new era of financial services where banking will no longer be "where you go, but something you do". A groundbreaking shift from a business-centric financial model to a consumer-centric financial model.

- Future of Banking

As consumers increasingly use the Internet to buy products and services, they demand payment and banking services that are convenient, secure and familiar. This trend of digital self-service in banks, regardless of time and location, is expected to continue thanks to the increase in mobile devices.

We have entered a new era of fully mobile real-time service environments (e-banking) that can provide human-centric virtual services without any physical infrastructure. To meet the needs of modern customers and remain relevant, banks must adapt to the key behaviors of mobile internet users, which are characterized by real-time, on-demand, fully online, DIY and social. In order for banks to provide fully customer-centric services, they need to be responsive to consumer demands immediately. 

As new technologies and consumer behavior continue to change the way we do business, financial institutions will need to assess their true points of differentiation and their economic sustainability over time. This could mean finding new ways to meet broader customer needs, differentiating the customer experience or seeking to become a best-in-class product manufacturer. Regardless of the strategic direction, being part of a mobile digital ecosystem will be inevitable for today's financial service providers to create lasting customer value.

[Grand Mosque, Sharjah, UAE]

- Shaping the Future of Digital Economy and New Value Creation

In emerging markets, where billions of people around the world lack access to traditional financial services, fintech could spark a revolution in financial inclusion and membership in the new global digital economy. Individuals and businesses have access to useful and affordable financial products and services to meet their needs – transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable manner. Financial inclusion is a key enabler for reducing poverty and boosting prosperity. 

The shift from paper to digital is accelerating and raising consumer expectations as distribution costs decrease and participation simplifies. This presents an opportunity for traditional financial institutions to transform traditional delivery options, while also challenging the business case for existing physical infrastructure. 

The digitization of financial services will also improve identity management through enhanced biometrics. This will impact access to banking services in underserved markets and improve traditional payments and global money flows. 

The digital economy and new value creation platforms help companies use technology to stay agile in the face of disruption and create new digital business models for the new normal – post-COVID, purpose-driven, sustainable and inclusive.

- Financial Inclusion

Those overlooked by traditional financial institutions will be able to access credit 

With the explosion of global internet penetration and the proliferation of digital labor markets or platforms, "gig work" will become the dominant mode of work. This shift has disproportionately affected low-skilled/blue-collar workers, who typically make up more than 80% of the workforce in developing countries. 

Internet platforms in e-commerce, food delivery, ride-sharing, logistics, etc. have low barriers to entry and are creating massive income-generating opportunities in countries where low-skilled populations do not have enough employment opportunities. Workers can participate in multiple platforms simultaneously and maximize their earnings. 

Soon, digital labor markets will embed financial services into their offerings, which will enable access to credit for many who have been overlooked by traditional financial institutions. 

Over time, technology will enable financial stability and discipline without requiring people to acquire relevant knowledge. 

AI and machine learning advisors will become ubiquitous, constantly recommending our next job, next investment, or next online course, truly democratizing growth and financial well-being.