Co-Chairs’ Progress Report to the Secretary-General
of the Task Force on Digital Financing of the
Sustainable Development Goals
26 September 2019
ABOUT THE TASK FORCE
The Secretary-General launched the Task Force on Digital Financing of the
Sustainable Development Goals on 29 November 2018 with a mandate to
recommend and catalyze ways to harness digitalization for the acceleration
of financing of the SDGs. The Task Force commenced its work in January
2019, meeting again in June 2019 to discuss progress. It has been advanc
ing its mandate through engagement and dialogue with thousands of experts
and is guiding and commissioning research. It launched a landscape study
conducted by the Task Force Secretariat on Harnessing the Digitalization of
Finance for the Sustainable Development Goals in June and has gathered
over a hundred documents through a Call for Contributions that is open until
the end of October 2019.
To subscribe the Task Force newsletter and see other Task Force materials, go
to www.digitalfinancingtaskforce.org or contact the Task Force Secretariat at
dftf.secretariat@uncdf.org
ABOUT THIS REPORT
This Progress Report is presented to the Secretary-General by the Task
Force Co-Chairs. Although still at an exploratory stage, it points to progress
in harnessing digitalization for the acceleration of financing of the SDGs and
to a small number of areas that offer scope for opportunities at scale. The
Task Force will publish the final report in early 2020.
The Progress Report has been prepared by Simon Zadek, Sherpa to the Task
Force Co-Chairs, with the support of Tillman Bruett, Director of the Task
Force Secretariat. Particular thanks go to colleagues from UNCDF, UNDP and
the Executive Office of the Secretary-General for their contributions, includ
ing Azeema Adam, Amil Aneja, Deena Austin, Fiona Bayat-Renoux, Christina
Carlson, Duygu Celik, Anne Folan, Joe Hooper, Judith Karl, Helene Molinier,
Marcos Neto, Imelda Panguito and Arti Singh. Any errors and omissions in
the Progress Report are the responsibility of the authors.
Acknowledged also is the financial support to the Task Force provided by
the Government of Germany and the Government of Italy.
www.DigitalFinancingTaskForce.org
@UNDFTaskForce #DigitalFinancingTF
Table of Contents
Co-Chairs’ Letter to the Secretary-General ……………………………………………………………………………………………4
The United Nations Secretary-General’s Task Force on Digital Financing of
the Sustainable Development Goals ………………………………………………………………………………………………………….6
Task Force in Brief …………………………………………………………………………………………………………………………………………8
Executive Summary …………………………………………………………………………………………………………………………………….10
1. Financing Sustainability …………………………………………………………………………………………………………………………16
2. Potential of Digital Financing …………………………………………………………………………………………………………………22
3. Digital Challenges …………………………………………………………………………………………………………………………………….32
4. Citizens as the World’s Financiers ……………………………………………………………………………………………………….38
5. The Governance Imperative ………………………………………………………………………………………………………………….44
6. Catalysing Change …………………………………………………………………………………………………………………………………..48
Acknowledgements ……………………………………………………………………………………………………………………………………..52
Endnotes ………………………………………………………………………………………………………………………………………………………..53
LIST OF EXHIBITS
1. Barriers to Financing the Sustainable Development Goals ……………………………………………………………18
2. What Is the Digitalization of Finance? ………………………………………………………………………………………………….19
3. Key Definitions Used by the Task Force ………………………………………………………………………………………………20
4. How the Digitalization of Finance Is Achieving the Sustainable Development Goals ………………..21
5. Trends and Insights that Relate to Digitalization ………………………………………………………………………………24
6. Analysis of the Current Application of Digital Finance to
the Sustainable Development Goals …………………………………………………………………………………………………..26
7. Potential of Digital Financing …………………………………………………………………………………………………………………30
8. Key Foundational Issues to Address for Digitalization to Bridge the Gender Gap …………………….34
9. Digitalization Challenges ………………………………………………………………………………………………………………………..37
10. Empowering Citizens Through Fintech in Support of Climate-Smart Infrastructure ……………41
11. Behavioural Dimensions of Digital Finance ……………………………………………………………………………………..43
Co-Chairs’
Letter to the
Secretary-General
4 Harnessing Digitalization in Financing
of the Sustainable Development Goals
We are pleased to present the Co-Chairs’ Progress Report of the Task
Force on Digital Financing of the Sustainable Development Goals,
which was established in late-November 2018 as part of your broader
strategy on financing the 2030 Agenda.
Our main goal in issuing this report is to inform you, Member States
and the broader stakeholder community of our progress and findings
to date. The final deliberations of the Task Force, along with its
recommendations, will be released in early 2020.
Building on our initial findings, the Progress Report points to emerging
aspects of the topic of digital financing that we believe warrant further
exploration. We hope that this report will complement and strengthen
your broader strategy, and the actions of many others, in accelerating
the financing of the Sustainable Development Goals.
The efforts of the Task Force have already benefited from the
contributions of many policymakers, regulators, business leaders,
experts and other stakeholders, as well as the wealth of experience
from across the United Nations itself. We hope that this report will
encourage others to help ensure the success of the Task Force by
contributing their experience, expertise and insights.
MARIA
RAMOS
Co-Chair
ACHIM
STEINER
Co-Chair
5
The United
Nations
Secretary
General’s
Task Force
on Digital
Financing of
the Sustainable
Development
Goals
6 Harnessing Digitalization in Financing
of the Sustainable Development Goals
7
Task Force
in Brief
The Secretary-General launched the Task Force on Digital Financing of the Sustainable
Development Goals on 29 November 2018 with a mandate to recommend and catalyse
ways to harness digitalization for the acceleration of financing of the SDGs. The Task Force
seeks to answer four core questions:
1. How will the digitalization of financing reshape the financial and monetary systems?
2. How has the digitalization of financing already contributed to financing of the SDGs?
3. What are the digital-finance–enabled opportunities for financing the SDGs and the
digital-finance–associated barriers and risks?
4. How best, and by whom, can the opportunities be realized and risks mitigated?
The Task Force comprises 17 members. Members include heads of fintech companies,
commercial and development banks, business associations and United Nations agencies, as
well as central bank governors and ministers. It is co-chaired by Maria Ramos, the former
Chief Executive Officer of Absa Group Limited of South Africa, and Achim Steiner, the Ad
ministrator of the United Nations Development Programme (UNDP) and Chair of the United
Nations Sustainable Development Group. The Secretariat of the Task Force is being led by
the United Nations Capital Development Fund (UNCDF).
Emerging from its first meeting in January 2019, the Task Force issued its Framework
Document that laid out its core approach, including scope, definitions, conceptual frame
work, crosscutting lenses and focus themes. Notably, the Task Force determined to do the
following:
• Focus on the impacts of digitalization on finance and money while recognizing the
broader technological transformations across communities and economies, and
so taking note of the findings and recommendations of the Secretary-General’s
High-Level Panel on Digital Cooperation.
• Focus on the short to medium term (1–5 years) in the context of a broader, lon
ger-term disruption to the financial and monetary systems, noting the urgency to
act and the difficulties in casting forward too far with so many uncertainties and un
knowns.
• Develop practical recommendations while actively catalysing ambitious initiatives,
the latter both through its membership and as an outcome of its convenings, and by
building collaborative, international initiatives.
8 Harnessing Digitalization in Financing
of the Sustainable Development Goals
The Task Force is advancing its mandate by marshalling knowledge and insights through engagement and di
alogue as well as technical and policy research. To date, there have been interactions with thousands of stake
holders, including practitioners, experts, business leaders, community and trade union representatives, regu
lators and policymakers, as well as many others concerned with specific aspects of the SDGs. Dialogues have
taken place in Amsterdam, Bangalore, Beijing, Brussels, Kuala Lumpur, London, Milan, Mumbai, Nairobi, New
Delhi, New York, Paris, San Francisco, Singapore and Toronto and through hosted engagements at the United
Nations Economic and Social Council as part of Financing for Development and the High-Level Political Forum on
Sustainable Development.
Ongoing research contributions have come from diverse sources. Individuals and groups of Task Force mem
bers are advancing research on specific topics, including UN Women on gender aspects of digital financing, DBS
Bank on digital financing and sustainable development in Southeast Asia, IEX Group and the World Economic
Forum on capital markets, and Ant Financial on digital financing of micro, small and medium enterprises.
A Call for Contributions has received over 100 submissions to date from around the world. In addition, the Task
Force is collaborating with several expert institutions, including Accenture, Refinitiv and the non-profit Sustain
able Digital Finance Alliance. Task Force members have helped launch a hackathon on fintech and sustainable
development at the pan-African event ‘Fintech and the Savannah’ in Nairobi, hosted by the Central Bank of Kenya
and the Monetary Authority of Singapore. Moreover, several members have launched their own in-house chal
lenges on how their respective organizations can take this issue forward.
The Task Force, with support from Accenture Development Partnerships, has prepared the white paper
‘Harnessing the Digitalization of Finance for the Sustainable Development Goals,’ which summarizes analy
ses of the effect of digitalization on the financial and monetary systems and links to SDG financing.
Going forward, the Task Force will continue to solicit contributions from experts and other stakeholders and
extend its dialogue series to identify more use cases, perspectives, insights and suggested actions.
This Progress Report to the Secretary-General presents highlights of the work to date. Although still at an explor
atory stage, it points to progress in harnessing digitalization for the acceleration of financing of the SDGs and to
a small number of areas that offer scope for opportunities at scale. The Task Force will publish the final report
in early 2020.
Funding for the Task Force is provided by the Multi-Partner Trust Fund Office of UNDP, with the generous support
of the Governments of Germany and Italy.
Note: Go to www.digitalfinancingtaskforce.org for more information.
9
Executive
Summary
10 Harnessing Digitalization in Financing
of the Sustainable Development Goals
Digitalization changes everything
and can accelerate the transition
to sustainable development.
Ninety percent of today’s available data has been produced in just the last two
years. The ‘new oil’ of the global economy—more, cheaper and faster data—
is driving a new generation of products and services, with dramatic chang
es in how they are created, delivered and consumed. Digitalization can con
tribute to sustainable development, but its net impact will depend on societal
choices as to its application and governance. On the one hand, it can deliver
new livelihood opportunities, provide better access to public services, lessen
the carbon footprint, and enhance accountability and good governance. On
the other hand, it can reinforce existing patterns of exclusion and discrimina
tion, drive new forms of inequality and encourage unsustainable practices,
including the environmental effects of digitalization.
Digitalization can help channel citizens’ money to finance sustainable devel
opment. Financing needs to support the transition to an inclusive, environ
mentally sustainable pathway, represented by the Sustainable Development
Goals (SDGs). Financial resources exist, in the form of savings and financial
assets that belong to citizens around the world. The need is to channel these
resources effectively through public and private means to finance the SDGs.
Digitalization can help overcome key barriers to the alignment of financial
f
lows with the SDGs, including a lack of awareness and capabilities, mis
aligned policies and broader incentives, and shortfalls in governance and ac
countability.
Digitalization is already supporting the financing of the SDGs. The issuance of
over half a trillion dollars of green and sustainable development bonds, made
possible by the availability of cheap and credible data, attests to the use of the
11
12 Harnessing Digitalization in Financing
of the Sustainable Development Goals
Empowering people is
ultimately how digitalization
will help to finance the
SDGs. So the Task Force is
not concerned with digital
innovation for its own sake,
but in how it can empower
people in making payments,
borrowing, saving, lending
and investing, and in
how they can hold those
accountable who manage
and spend money on their
behalf.”
MARIA RAMOS,
Task Force Co-Chair and former
Chief Executive Officer of Absa
Group Limited
monies raised. Satellite imagery is increasing information flows to investors
about climate risks and impacts, and it can identify emerging food security
challenges. Governments are raising and saving money through digitalized
tax collection and social welfare programmes. Millions of small businesses
and citizens, including women and other historically disadvantaged groups,
have better access to financial services through digital identification, big data
and artificial intelligence. Solar energy units, financed through crowdsourc
ing and pay-as-you-go business models powered by mobile payment plat
forms, are now in the hands of millions of low-income households, improving
household health, livelihood and educational opportunities.
Going forward, digitalization offers significant opportunities for accelerating
the financing of the SDGs by supporting, for example, the following:
• Increased mobilization of funds by improving how domestic sav
ings are channelled into long-term investment; reducing poverty by
increasing savings through the access and use of digital savings ac
counts; enhancing government revenue by making it harder to evade
the payment of taxes; and increasing the mobilization of international
f
inance at a lower cost through improved measurement and man
agement of risks and impacts.
• Enhanced use of funds by improving the performance of public fi
nancing through better impact targeting and tracking, as well as
strengthened public accountability; augmenting the performance of
impact-conscious investors by raising the quality and reducing the
costs of tracking; achieving greater alignment of private financing
with the SDGs through better and cheaper assessments of SDG-rel
evant financing risks and opportunities; and increasing overall align
ment by strengthening data-supported policies, including fiscal in
centives, regulations and standards.
Digitalization could support three disruptive waves of change that could
dramatically shift the centre of gravity of the financial system towards the
citizen. Simply better, cheaper and more accessible information could sup
port the first wave of opportunities to empower citizens in their financing
decisions, from their roles as savers and borrowers to consumers and pen
sion policyholders. Disruptions caused by digitalization that disintermediate
incumbent financial intermediaries, such as banks, could provide a second
wave as new data-fuelled actors find fresh ways to customize and deliver
f
inance. Finally, digitalization could offer citizens the means to act collective
ly, providing a potential third wave of opportunities for citizens to take more
control over their financial lives.
13
However, the potential sustainable development dividends from digital fi
nancing are not guaranteed by the technology or market innovation alone.
Notably, the dividends are not available to those people without access to af
fordable digital infrastructure, those lacking the necessary digital capabili
ties or those deliberately excluded from access to digital opportunities. For
those with access, digitalization can deliver benefits but also bring uncer
tainties, risks and negative consequences. Unchecked, artificial intelligence
could lead to exclusionary profiling and more opportunities for the channel
ling of illicit financial flows. Ever faster, hyper-liquid financial markets could
reduce financing for the SDGs by increasing the profitability of short-term
trading. Digital currencies could take away countries’ ability to manage their
own monetary and economic affairs, just as easily as they could smoothen
and cheapen payments. Today’s digital disruption of incumbent financial in
stitutions does not alone prevent the emergence of new, digitally powered
forms of market concentration.
Robust governance innovations are needed to ensure that digitalization
supports the alignment of finance and money with citizens’ interests and
sustainable development. Shaping digital financing in the public interest is
one of the governance challenges of this time. Approaches siloed by jurisdic
tion, governance domain and impact area are unlikely to be sufficient. There
is a need for governance innovations that are underpinned by strengthened
mandates, capabilities and instruments of central banks, financial regu
lators and standard-setters, as well as enhanced collaboration among all
of those bodies and members of the broader policy community. Attention
will need to be paid to how digitalization itself is expressed in new forms
of governance, embedded in technical standards, protocols and algorithms,
and deployed through new business models. It will be critical to ensure that
there is an inclusive approach to the evolution of such new rules of the road,
to maximize the potential benefits of governance and associated market in
novations while avoiding the possible negative effects of a new generation of
exclusionary, institutional arrangements.
Findings to date point to some high-potential areas on which the future
work, initiatives and recommendations of the Task Force will focus:
1. Identifying major areas of opportunities for advancing digital ap
proaches to the mobilization and effective use of finance in support of
the SDGs, both to address supply (including the public and private use
of domestic savings and international capital flows) and to address
specific aspects of sustainable development (such as gender, climate
and displaced people).
14 Harnessing Digitalization in Financing
of the Sustainable Development Goals
The Task Force is not
looking to write up what
is happening today but
rather is mandated by
the Secretary-General to
understand and anticipate
how the profound changes
at the intersection of
f
inance, technology and
sustainability are going to
determine the actions of
both governments and of
market actors.”
ACHIM STEINER,
Task Force Co-Chair and
Administrator of the United
Nations Development Programme
2. Supporting the governance innovations necessary to overcome bar
riers in harnessing digitalization for the financing of the SDGs while
mitigating risks arising through digitalization (including the consider
ation of roles for policymakers and corporate governance as well as
non-traditional approaches to governing finance and money involving
state and non-state actors).
3. Building national and regional capabilities to accelerate the local de
velopment of SDG-aligned digital financing and to better align inter
national developments in digital financing and money with domestic
priorities (including ways to stimulate and shape market innovations
to support SDG-aligned financing).
4. Pinpointing needs and occasions for international cooperation (in
cluding the United Nations) to realize opportunities, overcome bar
riers and risks (including through investments in key infrastructure
and access enablers for women and other disadvantaged groups)
and develop critical capabilities (including those of developing coun
tries to engage in broader developments in digital financing).
5. Measuring progress in harnessing digital financing of the SDGs and
supporting more systematic international, national and regional plan
ning and policy development as well as coordination with business
and other non-state actors.
This Progress Report is an open invitation for contributions by policymak
ers, experts, market practitioners and consumer advocates in addressing
these focus areas. The mandate of the Task Force is to provide recommen
dations and catalyse initiatives that will result in the more effective harness
ing of digitalization for the financing of the SDGs. Its work to date has ben
efited from many contributions of analyses and insights, as well as broad
recommendations and proposed initiatives. While building on the progress
made to date and delivering its final report in the first half of 2020, the Task
Force hopes to benefit further from such inputs. It, therefore, invites anal
yses and proposals for recommendations and specific partnership initia
tives. As part of its ongoing outreach efforts, it will continue to engage in
dialogue with policymakers, experts and practitioners, while drawing from
major reports and ongoing initiatives such as the Secretary-General’s
High-Level Panel on Digital Cooperation and the United Nations initiative Fi
nancing for Development.
15
1.Financing
Sustainability
16 Harnessing Digitalization in Financing
of the Sustainable Development Goals
Transitioning to a sustainable
development pathway is a
historic challenge.
The 17 Sustainable Development Goals (SDGs) have been adopted through
the United Nations as the collective ambition and approach to achieving an
inclusive, environmentally sustainable society.1 Collectively, there is more
than enough information and knowledge, technology, innovation capacity and
f
inance to get the job done. The challenge is to deploy these capabilities, which
are unevenly distributed and often poorly used, in ways that ensure that no
one is left behind. Doing so requires solutions that can overcome barriers
that today prevent, for example, a nation from moving beyond a fossil-fuel
intensive economy, overcoming exclusion and discrimination, including the
marginalization of women, and ridding the world of illicit financial flows that
drain much-needed resources for development.
Financing is a case in point, which is plentiful but not aligned with the SDGs.
Trillions of dollars are needed to finance the SDGs annually. There is, how
ever, no shortage of finance as such. Both governments and private financial
institutions can draw from the many trillions of dollars deposited in people’s
savings each year and from hundreds of trillions of dollars created and man
aged by the world’s financial and capital markets. Indeed, finance today is not
only plentiful but also cheap, with US$12.5 trillion of savings and private capi
tal currently earning negative interest rates.2
There is, then, a historic opportunity to channel available finance away from
unproductive and, at times, destructive uses to fund what is most needed
where it is most needed, particularly in the least developed countries. One
need is to overcome barriers in order to channel a greater percentage of the
US$350 trillion in equities, bonds and bank loans towards realizing the SDGs.
17
The barriers to overcome in accelerating the financing of the SDGs are well
understood, through endeavours such as the United Nations initiative Financ
ing for Development4 and the work by the Group of 20 on financial inclusion,5
climate risk,6 and green and sustainable financing.7 Topping many lists of key
barriers are insufficient and poorly used public finance, as well as compar
atively low risk-adjusted returns for sustainability aligned private financing,
with underlying problems including a lack of adequate metrics and low-cost
data, weaknesses in financial and capital markets, and policy shortfalls in ca
talysing the transition to sustainable development.
EXHIBIT 1
Barriers to Financing the Sustainable Development Goals
• Public funds can be insufficient or poorly used.
• Financial returns can be lower than other investment options.
• Maturity mismatches face banks that are constrained in financing
long-term investments.
• Metrics and data are lacking for sustainability-related risks and
outcomes.
capital.
needed projects.
• Short-termism incentivizes financial market actors to disregard
longer-term social and environmental impacts.
• Policy weaknesses can create misaligned incentives for private
• Capital concentration in a few wealthy countries fails to reach
Source: Secretary-General’s Task Force on Digital Financing of the Sustainable Development Goals,
‘Framework Document’ (New York, 2019).
Note: Barriers are illustrative and do not apply to all financing of the SDGs.
Progress is being made in aligning finance with sustainable development.
A growing number of initiatives is making a difference across diverse coun
tries and contexts, aspects of financing and parts of the SDGs, as summa
rized, for example, by the work of the United Nations Inter-agency Task
Force on Financing for Development.8 Such progress is being driven by a
broadening range of actors that now includes many of those responsible for
governing finance, notably central banks and financial regulators, as well
as many market coalitions, such as the Climate Action 100+ group of inves
tors9 and the Principles for Responsible Investment network.10
18 Harnessing Digitalization in Financing
of the Sustainable Development Goals
The impact [of digitalization]
is apparent in a multitude
of ways, such as digital
payment systems or the
emerging gig economy,
leading to remarkable
success stories. But just as
technology is improving the
lives of millions around the
world, it is also changing
the nature of work, doing
away with existing jobs
and launching entirely
new fields of employment
that didn’t exist a few
years ago. Investment in
human capital can help
drive inclusive, sustainable
economic growth.”
HENRIETTA H. FORE,
Task Force Member and Executive
Director of United Nations Children’s Fund,
Remarks from ‘How can we help young
people build a better future?’
TED talk, 24 October 2018
Progress nevertheless remains wholly inadequate and uneven. Investment
in low-carbon, climate-resilient infrastructure languishes by an order of
magnitude below what is needed, despite the historically low cost of capital
and the fact that investment in fossil-fuel–intensive assets continues to out
strip clean-energy investments.11 Despite significant progress in the area of
f
inancial inclusion, over 1.7 billion people remain unbanked,12 with another
4 billion people offline and unable to participate in the digital economy.13 As
of 2018, African companies receive only 0.3 percent of total global fintech
investment.14,15 Women remain 10 percent less likely to own a mobile phone
than men and 26 percent less likely to use mobile Internet,16 and digital fi
nance has had little impact on the global gender gap in finance. Despite ef
forts to stem money laundering and other illegal financial flows, it is widely
accepted that such flows annually amount to hundreds of billions of dollars,
reducing resources available to invest in long-term development.17
EXHIBIT 2
Digital delivery of services
that capture data
Machine and analytics
driving decision-making
New finance and business
models developing based on
data and digital delivery
Data rich on-line platforms
acting as financial markets
and exchanges
Digital currencies redefining
understanding of money
19
EXHIBIT 3
Key Definitions Used by the Task Force
Digital is the shift from paper to digital format.
Digitalization is the shift from manual to automated processes. Fur
thermore, it is the integration of digital technologies into everyday life
by the digitalization of everything that can be digitalized.
Fintech is the range of technologies within the scope of ‘digital financ
ing,’ including mobile payment platforms, artificial intelligence, big
data, Internet of things, blockchains and cryptocurrencies.
Financing concerns the activities, flows and institutions of the entire
f
inancial system, including investment, lending, insurance and pay
ments, as well as diverse functions such as payment systems, inter
mediation, asset creation, insurance and the related monetary system.
Digitalization of finance comprises the systemic changes to the finan
cial ecosystem, aided by fintech, that lead not only to the digitalization
of finance-related activities, as well as the broader associated chang
es in business models, products and services, but also to changes in
the real economy, monetary systems, governance models, and citi
zens’ relationships with finance and the real economy.
Sustainable Development Goals (SDGs) are the 17 goals to which
world leaders agreed in 2015 to achieve a better world by 2030 and,
through SDG 13 (Climate Action), include the goals established through
the Paris Agreement on climate. These are Global Goals and apply to
all Member States.
One of the least disrupted
industries of all time is
f
inancial services. There
are various valid reasons
for that, and ultimately,
it’s going to be about
working and collaborating
together.”
AMBAREEN MUSA,
Task Force Member and
Founder and Chief Executive
Officer of Souqalmal,
Remarks during Davos 2019
20 Harnessing Digitalization in Financing
of the Sustainable Development Goals
EXHIBIT 4
How the Digitalization of Finance is Achieving the Sustainable
Development Goals
BIMA, through its mobile health service, provides mobile prepaid subscribers and their families with
unlimited access to medical consultations and health programmes over the phone, paid via phone credit.
Since its inception, mHealth from BIMA has launched in Bangladesh, Cambodia, Ghana, Pakistan and
Paraguay and has reached over 2.2 million customers.
Source: http://www.bimamobile.com/our-services/mobile-health/
Betterment is among the top investment robo-advisers in the United States of America. It has included a
socially responsible option, with a detailed explanation of how it uses MSCI indexes to automate investment
decisions for its customers.
Source: https://www.betterment.com/resources/research/socially-responsible-investing-portfolio/
The Government of Canada set up the Pakistan Relief Fund in 2010, which raised US$47 million from
individual citizens through online donations. The Canadian International Development Agency matched those
funds, resulting in US$94 million raised.
Source: Eytan Bensoussan, Radha Ruparell and Lynn Taliento, ‘Innovative development financing,’ August 2013.
Ethis Ventures partners with, develops and operates ethical and Islamic crowdfunding platforms in
Malaysia and Singapore for micro, small and medium enterprises and real estate, helping over 8,000
families crowdsource funds for new homes.
Source: JD Alois, ‘Malaysia Updates Crowdfunding Framework, Securities Commission Malaysia Affirms its Support of
Fintech,’ 19 May 2019.
Hello Tractor provides online booking and payment services for farmers to rent farm equipment while
providing GPS data to allow owners to track the equipment’s location and use. It is working with John Deere
to import 10,000 tractors to Africa, which are estimated to bring 9 million hectares of land into production,
create 37 million metric tons of additional food and add over 2 million direct and indirect jobs.
Source: Adele Peters, ‘This startup lets African farmers hire an on-demand tractor to boost their harvests,’ 29 August 2018.
DBS Bank and Halcyon Agri Corporation recently developed HeveaConnect, a digital-trade marketplace
for sustainable rubber. The marketplace enables stakeholders to track pricing and supply information and
transact directly, as well as to access other value-added services.
Source: https://www.dbs.com/newsroom/DBS_partners_Halcyon_to_set_up_HeveaConnect_a_digital_trading_
marketplace_for_sustainable_rubber
Unified Payments Interface links 143 banks in India to a simple, secure fund routing and merchant payment
platform, offering immediate, low-cost money transfers for individuals or businesses with a bank account or
mobile wallet. After three years, it now processes over 800 million payments worth US$20 billion per month.
It is also used to process over 450 government social payment schemes.
Source : https://www.npci.org.in/product-statistics/upi-product-statistics
X-Road in Estonia digitalized income-tax declarations by linking citizens’ employment and tax records, saving
the equivalent of 820 years of work in 2016 or one workweek per person.
Source: Heiko Vainsalu, ‘How do Estonians save annually 820 years of work without much effort?’ December 2017.
21
2.Potential of
Digital Financing
22 Harnessing Digitalization in Financing
of the Sustainable Development Goals
Technology is a basic right,
not a luxury. We need
to change that mindset
if we are to address the
chronic underinvestment
in women and girls and
achieve their equal access
to technology as a norm.
This can be accelerated
by embedding people
from the development
sector within the worlds of
technology and finance, and
by governments enlarging
their concept of necessities
beyond water, food, shelter
and energy.”
PHUMZILE MLAMBO-NGCUKA,
Task Force Member and
Executive Director of UN Women,
Remarks during a discovery interview
with the Task Force secretariat
and Accenture research team,
January 2019
Data-driven innovations
are reshaping the world
of finance.
Data has been dubbed the ‘new oil’ of the 21st Century digital economy. Ex
traordinarily, 90 percent of the available data that exists in the world today
has been created in the past two years.18 Digital financing, or so-called ‘finan
cial technologies’ (fintech), include mobile payment systems, artificial intelli
gence, big data, Internet of things, blockchains and digital currencies. Glob
al financing of fintechs has grown to US$111.8 billion, up 120 percent from
US$50.8 billion in 2017.19 Global spending on artificial intelligence is already
near US$20 billion and projected to grow to US$52 billion by 2021, with the
f
inancial market industry accounting for US$3.3 billion in 2018 alone.20
Digitalization takes the world beyond the effects of efficiency and cost savings
in shaping new financial products, enterprises and markets. Digitalization can
create tremendous efficiency gains, which can lead to greater access, lower
prices and more choice. Digitalization fills a system with data and connections,
leading to new business models, alternative data for analysis and risk assess
ment, as well as more and different products, while opening the system to new
actors and new approaches with their own risks and rewards. Digitalization
goes further in harnessing the digital revolution in shaping new products, en
terprises, markets, investment opportunities and related governance and in
stitutional arrangements. It changes how and what people consume, how and
where individuals and companies access finance, and how investments are
structured and sold. It is also beginning to change how and by whom financing
is done, as new data and technology drive how decisions are made, financial
assets are created and traded, and Internet-based social, e-commerce and fi
nancial platforms become clearing houses and originators of finance.
23
Digitalization … holds many
promises for deciphering
the interconnections of
social and environmental
issues … Digitalization
also holds significant
opportunities to resolve
environmental issues, not
least by helping redirect
financing towards more
environmentally efficient
users of capital. New
abilities for obtaining
and analysing data at
scale and at speed vastly
enhance opportunities
to incorporate
environmentally relevant
information into risk
analysis and asset pricing.
This, in turn, changes
the cost of capital for
companies in the real
economy.
PIYUSH GUPTA,
Task Force Member and
Chief Executive Officer and
Director of DBS Group,
Remarks in an article for
Davos 2019
EXHIBIT 5
Trends and Insights that Relate to Digitalization
Trends
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.
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.
There is a proliferation of digital
business models, both within finance
and in the real economy, built on digital
finance (e.g., e-commerce and pay-as
you-go models).
The rise of platforms based on all-to-all
models, through social and e-commerce
platforms as well as trading platforms, is
democratizing finance and commerce.
Global monetary systems face new
questions and challenges, as new
models mature and cryptocurrencies
emerge and seem poised to go
mainstream.
Insights
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.
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.
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.
The private sector is increasingly
funding the SDGs, because of the growth
of reliable financial and alternative data,
but demand for sustainable investments
is now outstripping supply.
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.
Source: Secretary-General’s Task Force on Digital Financing of the Sustainable Development Goals
and Accenture Development Partners, ‘Harnessing the Digitalization of Finance for the Sustainable
Development Goals’ (New York, 2019).
24 Harnessing Digitalization in Financing
of the Sustainable Development Goals
585 of the largest public
pension plans and
sovereign wealth funds
have an estimated $22
trillion of assets. As long
term investors, these
funds are well placed to
weigh the impact of their
investments towards a
future world in which
their citizens can thrive.
Positively meeting the
sustainable development
goals (SDGs) is part of that
future. In an increasingly
digitalized era with a
challenging investment
landscape, these investors
could begin to tilt the
balance of investment
patterns to mobilize more
capital towards projects
and ideas that mitigate
climate change, alleviate
poverty or provide stability
to displaced people in the
most vulnerable regions.
These goals can still be
achieved in our lifetime.”
POOMA KIMIS,
quote from the Second Meeting
of the Task Force, June 10 2019
Digitalization can make a meaningful difference if it helps to overcome to
day’s barriers to the financing of the SDGs. By reducing the cost of financ
ing, for example, digitalization can accelerate financial inclusion and improve
the achievement of broader social and environmental impacts of financing
decisions. For instance, today 1.2 billion Indian citizens have a digital identity
that connects them to banks, credit bureaus and a wide range of payment
options.21
More, cheaper and faster data have supported the issuance over the last five
years of half a trillion dollars of green and sustainable development bonds.22
An ever-greater proportion of the now US$689 billion in remittances to low-
and middle-income countries reaches the intended destination,23 with digital
remittances costing about half of the global average of 7 to 8 percent.24 The
success of the world’s carbon trading markets and the growing practice of
climate risk assessments depend on cheap, accurate and plentiful data, in
creasingly drawn from such diverse sources as satellite imagery, weather
data and Google searches. Governments have untapped potential to assess
tax at the source of income or sale to help bolster the public financing that is
critical to economic development. It is estimated that 90 percent of the devel
oped world’s trades are executed by computer investment algorithms,25 cre
ating the opportunity for the right data, policies and incentives for SDG-relat
ed investing to be included in investment algorithms to shift trillions of dollars
towards more beneficial (or less harmful) real-world outcomes.
Digitalization drives new financing ecosystems that involve multiple market
and policy actors. Inspired by the Kenyan experience, pay-as-you-go solar
units powered by mobile payment platforms are now in the hands of millions
of African households and are inspiring similar models around water, sanita
tion and education.
Financing clean energy and action on climate can be accelerated through dig
italization, demonstrating both top-down and bottom-up approaches linking
retail and capital markets:
• At the local level, digital innovations such as remote sensors com
bined with digital payments and pay-as-you-go business models have
driven distributed energy growth up and costs down.26
• At a global level, the growing set of reliable data sources on ‘green
ness’ or carbon intensity of investments, including satellite data from
companies such as Planet Labs,27 combined with policy mandates, is
driving growth in both carbon markets and climate-related liability
claims.
Public and private investors have responded to these evolving financing eco
systems by funding 40 percent of green bonds and providing 90 percent of
renewable energy investment globally.28