An Historic Opportunity

Digital disruption creates an historic opportunity to reshape finance. Mobile platforms, data analytics and digitalized public finance are bringing sophisticated financial services to mass markets. If harnessed to support vulnerable people, reduce inequalities, sustain livelihoods and strengthen solidarity this can propel us towards achieving the Sustainable Development Goals (SDGs). However, it  could also deepen exclusion, increase inequality and further divide us.

Digitalization Is Transforming Finance

Tens of millions of businesses, particularly smaller enterprises, depend on digital markets, with an estimated 1.9 billion people worldwide purchasing goods online, amounting to US$3.5 trillion of sales in 2019.

Objects are increasingly digitally connected, enabling them to respond to their context, and to relate to each other in shaping integrated functions and networked intelligence. Mobile platforms and data analytics are bringing sophisticated financial services to mass markets. Governments are digitalizing public finance whilst a third of US public equities trades are executed by computer-managed funds. Fintech-powered start-ups, financial service providers, and ecommerce, social media and search platforms are all part of the disruptive wave.


Digital technologies are rapidly transforming society, simultaneously allowing for unprecedented advances in the human condition and giving rise to profound new challenges.

UN Secretary General’s High-Level Panel on Digital Cooperation

The SDGs Are A Global, Shared Agenda

The SDGs have been adopted by all United Nations Member States as part of the core of the 2030 Agenda for Sustainable Development. As such they represent the collective priorities of the world’s citizens.

Citizens are the ultimate owners of the world’s income and wealth.

  • Tens of billions of decisions every day determine what and how we produce and consume, today and into the future.
  • In principle, citizensUS$130 billion in daily purchases should reflect their informed choices.
  • Governments’ daily global spending of US$85 billion should reflect how citizens want their money to be used.
  • The allocation of US$382 trillion of assets managed by financial institutions and channelled through today’s global financial and capital markets should be guided by citizens’ preferences.

[there is an urgent need to] return the financial services industry to what it is supposed to be – an industry that serves people

Kristalina Georgieva,
Managing Director, International Monetary Fund

Finance Is Not Aligned With These Priorities

Since the Global Financial Crisis of 2008, financial services are less trusted ‘to do what is right’ than any other part of the business community, although most people trust banks to safeguard their money and their data. Most citizens distrust how governments use their money. Over half (57 percent) of the respondents of a multi-country survey say governments serve the interest of the few, while less than a third (30 percent) say that governments serve the interests of everyone.  Citizens spending behaviours too often do not reflect their concerns about their children’s futures, inequality, environment and climate.

Digitalization Offers An Historic Opportunity

Digitalization offers a historic opportunity to overcome these shortfalls, gaps and weaknesses in aligning a new generation of financing instruments, markets and institutional arrangements with the SDGs.

Digitalization of finance is essential in the fight against organized crime, a US$4 trillion global business which destroys value for the private and public sectors, and society itself. Digitalization can improve tax collection and make public financial management more effective and transparent.

Cheap, credible data is a pre-requisite in growing the multi-trillion-dollar market for green and sustainable ‘use of proceeds’ bonds, and in integrating climate risk into the world’s financial and capital markets.

The Crisis Has Made Digitalization Far More Important

Digital finance has become a critical lifeline during the crisis for billions of people. Innovations and investments have underpinned rapid scaling of support to vulnerable groups, from extending the reach of social safety nets and health systems to new ways to secure digital livelihoods and undertake mutual support within families and communities.

Governments are using digital payment platforms to operationalize social safety nets and extend the reach and effectiveness of health systems. Businesses are depending on ecommerce for their continued existence. People are reaching for the digital world to communicate with their families and friends, to buy what they need, and where possible to continue their work and livelihoods.

The move to conduct business, entertainment, education, health and other public services online is being accelerated. Digital financing will make social safety nets involving cash transfers easier and cheaper to manage. Public and philanthropic efforts to support those in need have also turned to the world of digital financing, leveraging crowdsourcing to raise funds and target transfer payments to support people in need.

This surge in the digital world amplifies the opportunity and the need for it to be harnessed in the longer-term pursuit, and financing, of sustainable development.

Barriers And Risks

Barriers and risks could restrict the realization of digital financing’s potential or further divorce finance from people’s needs. Physical exclusion is the most obvious barrier. There are still 750 million people who remain unserved by mobile data networks. A further 3.3 billion people lack adequate resources and capabilities to take advantage of the digital world. Women, youth and other disadvantaged groups are more reliant on unregulated informal financial services and have less access to economic opportunities. Resistance to digitally-enabled market entrants can restrict innovation which would reduce costs and enable more people to be reached. Governments can be unwilling or unable to improve targeting and transparency of public financing even where the technology makes it possible. Many developing countries struggle to make use of the power of data in driving better economic decision-making.

“This historic opportunity combined with this unprecedented crisis provides a unique moment and imperative to act in harnessing digitalization to accelerate financing of the SDGs.”


Digitalization opens new routes for embezzlement and fraud and provides ways to hide illicit financial flows. Cybersecurity threats increase. Biases in algorithms or underlying data sets may reproduce discrimination. Digitalization  may increase short-termism in financial markets. Digitalization increases the likelihood of a new generation of highly concentrated financial markets because of its tendency to provide ever-increasing benefits to scale. It may reduce autonomous economic policy space through the loss of control over macroeconomic and monetary policy.

Repurposing finance to serve citizens in supporting inclusive sustainable development requires smart and purposeful market and governance innovations. Digitalization can enable financial products to take better account of sustainable development risks and opportunities. Market actors, both existing and new, play a critical role in developing financial products that take the SDGs into account, both in terms of environmental and social risks and positive impacts that customers and users care about. Governance innovations will be needed to incentivize and, where necessary, require these developments, as well as mitigate risks from digitalization itself.

There is a short-lived window of opportunity to achieve systemic change. Catalysing major change becomes possible during critical junctures of disruption. The opportunity arises when historic circumstances converge to create the perfect storm upsetting the status quo and opening routes to create something better. Peoples’ actions, rather than technology or fate, determine the outcome of these moments. The nexus of finance, digitalization and the transition to an inclusive sustainable development is a case in point.

Failure to act would be a wasted opportunity and risk finance’s divergence from the needs of citizens for an inclusive, sustainable developmentActing with purpose and ambition, on the other hand, opens the possibility of overcoming barriers to securing financing for the SDGs, whilst mitigating risks associated with digitalization of finance.