(MENAFN- Market Press Release) November 24, 2021 10:12 am - Read how Fintech is connected with the development of a sustainable global economy and its role in UN's Sustainable Development Goals.
COVID-19 has left the financial system of most countries in turmoil and transition at the same time. The resulting financial crisis and its aftermath have wreaked havoc on the worldwide political economy, resulting in a prolonged era of low growth and volatility. Alongside, the financial system is transitioning in part as a result of the upheaval, which has increased the role of developing nations in global banking through policy and regulatory forces. The pandemic was a wake-up call for most countries and industries with respect to the importance of sustainability.
But how can Finance be connected to Sustainability? How can technological advancement in the industry contribute to green and social values? The combination was discussed by United Nations in a report called - Fintech and Sustainability Development: Assessing the Implications. The report compares sustainable development, and new (financial) technology with two 'strains' of DNA. They are both capable of 'developing new, sustainable business models' and have the same 'fundamental potential as change and effect drivers.' It is aimed at encouraging financial institutions and fintech start-ups to collaborate with a new sense of purpose by including long-term development goals into their new value propositions.
The Role of Fintech in the United Nations Sustainable Development Goals
The SDGs were established by the United Nations member states (193 of the world's 195 countries) in 2015 as a worldwide call to action to eradicate poverty, safeguard the environment, and ensure that the entire population experiences peace and prosperity by 2030. The 17 key goals are defined with a principle of 'leaving no one behind' and entails taking concrete steps to alleviate severe poverty, reduce disparities, combat prejudice, and accelerate progress for the most vulnerable.
Let's understand the role of the fintech industry in achieving these goals.
Blockchain Technology
Invented for the Bitcoin use case, blockchain technology has tremendous potential to help achieve the SDGs - for starters it can be used to deliver food vouchers in refugee camps, in upgrading property and land registries as well as in boost access to national identification. A notable example here is the use of technology by the WFP (World Bank Food Program). WFP used blockchain to send cash to Syrian refugees in Jordan and needy families in Pakistan. The migrants use a biometric scan of their eyes to purchase food from local stores. This allows for the digitization and protection of beneficiaries' data, the elimination of fraud, and the reduction of administrative costs.
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