Digital Financing Trends and Insights

As part of the Task Force’s work it under took an analysis how will digitalization is reshaping financial markets and monetary systems in order to consider how it is affecting how the SDGs are financed and what the biggest opportunities, barriers and risks are.

Key trends and insights from this initial research undertaken with knowledge partner Accenture, are summarised below:

Trends	Insights
Core infrastructure is undergoing substantive changes as legacy institutions invest in the overhaul of core systems and keep up with new market entrants that exploit niches with newer technology.	Retail innovations are leading the pack, as tech-based models proliferate across finance and the real economy, primarily as a force for greater inclusion and choice.
Front-office innovations are being implemented to engage customers and collect data, both helping to decrease costs and provide the data needed for better product design, services and choices.	Public finance lags behind, as governments are slow to adapt and unlock the potential that digitalization provides in the mobilization and utilization of finance and the possible innovations for financing public infrastructure and goods.
There is a proliferation of digital business models, both within finance and in the real economy, built on digital finance (e.g., ecommerce and pay-as-you-go models).	Technology solutions are still developing and finding valuable uses, with artificial intelligence making great leaps in recent years and blockchains and the Internet of Things still in search of the best applications to finance.
Global monetary systems face new questions and challenges, as new models mature, and blockchain-powered cryptocurrencies emerge and seem poised to go mainstream.	There will be a period of competition of ideas and business models and a race for data, but companies with existing or possible future datasets, which fuel the growing digital economy, that can absorb the best ideas will have the advantage.

Task Force, with Accenture: Harnessing Digital Finance for the Sustainable Development Goals (2019)

Trends

Insights

Core infrastructure is undergoing substantive changes as legacy institutions invest in the overhaul of core systems and keep up with new market entrants that exploit niches with newer technology.

Retail innovations are leading the pack, as tech-based models proliferate across finance and the real economy, primarily as a force for greater inclusion and choice.

Front-office innovations are being implemented to engage customers and collect data, both helping to decrease costs and provide the data needed for better product design, services and choices.

Public finance lags behind, as governments are slow to adapt and unlock the potential that digitalization provides in the mobilization and utilization of finance and the possible innovations for financing public infrastructure and goods.

There is a proliferation of digital business models, both within finance and in the real economy, built on digital finance (e.g., ecommerce and pay-as-you-go models).

Technology solutions are still developing and finding valuable uses, with artificial intelligence making great leaps in recent years and blockchains and the Internet of Things still in search of the best applications to finance.

Global monetary systems face new questions and challenges, as new models mature, and blockchain-powered cryptocurrencies emerge and seem poised to go mainstream.

There will be a period of competition of ideas and business models and a race for data, but companies with existing or possible future datasets, which fuel the growing digital economy, that can absorb the best ideas will have the advantage.