The Future of Digital Finance
What is Digital Finance?
Digital finance suggests an alternative way of financial services other than the traditional way. Digital finance transactions happen on tablets, smartphones, computers, or any devices with internet services. Importantly, digital finance has made cross-border transactions easy and helped rural locations with little or no infrastructure access these essential financial services.
Digital finance at a glance
In 2020, there was widespread fear and apprehension among different people. A lot of businesses shut down. Freedom of movement jolted. Food scarcity and chaos were the order of the day. All these happened because a pandemic broke out. Covid-19, a viral infectious disease, halted the world for some time. Innovators came around for the world, and many digital solutions were championed to stabilize the world after the covid-19 lockdowns were lifted. Things needed to happen differently.
The future of Digital Finance
Since the pandemic happened, at least 95% of customers have made lifestyle adjustments to their ways. There’s been an incredible 343% increase in online shopping. At least 79% of the employees prefer to work from anywhere else apart from their home or office. 46% prefer not to work or reduce traveling time to their workplace.
All these are data representations of the shift in how we do things due to the pandemic eruption. Workers and customers have shifted to new behaviors and embraced technological change.
There is now new business operating models since there’s been a significant decrease in workplace and office space activities.
There are now fintech companies championing new ways of business transactions. With the help of data, the economy is moving on gradually from the effects of a standstill situation.
In 2022, there’s a $266b new investment in alternative digital finances. The pandemic has helped us understand the frail nature of only traditional financial institutions, and efforts are in progress to avoid such a scenario in the future with the evolution of digital finances.
I know what will be on your mind for those who have always advocated for traditional finance; why are we talking about digital finance? Why are we trying to pivot from the typical banking systems to digital finance?
What are the benefits of Digital Finance?
Digital finance is transforming lives, especially for people in developing countries who don’t have as much access as others. Many businesses are improving by cutting down costs and accelerating transactions. There’s more transparency in dealings in digital finance as there’s no need for a middleman. Notably, digital finance is aiding cross-border business transactions and improving the general economic outlook for countries fully embracing it.
These 3 things summarize the importance of digital finance:
As previously explained, digital finance promotes more inclusivity in its operations. Almost everyone has access to digital financial services irrespective of the state of infrastructure in their locations. It helps reduce the wait time and eliminate bottlenecks associated with the traditional ways of carrying out transactions.
More efficient financial service
Digital services aid efficient and smooth financial service because it is fast and seamless. You can carry out a transaction within minutes with little knowledge of the tools needed. Also, most charges have been eliminated because there’s no intermediary.
Promote economic development
Digital financial services help accelerate cross-border economic development. A buyer from country A can get something from a seller from country B in no time, which improves both countries’ financial situation.