Digital Economy Key in Enhancing Citizens’ Financial Empowerment

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As countries are recovering from the social and economic impact of the COVID-19 pandemic, a new UN report highlighted the importance of digital economy, especially digital financing, in ensuring a sustainable future and empowering citizens as taxpayers and investors in their finances.

‘People’s Money: Harnessing Digitalization to Finance a Sustainable Future’, which was released by the United Nations (UN) Secretary-General’s Task Force on Digital Finance on 26 August 2020, summarised findings and recommendations by the task force since its inception in 2018, following extensive engagement with stakeholders and research.

The Task Force was established to enhance understanding of the risks and benefits of the fast-moving financial technology (fintech) and digital finance sectors, and was part of the UN Secretary-General’s strategy to support financing for the 2030 Agenda for Sustainable Development.

In essence, the report stresses that digitalisation and its use should be a choice rather than an inevitability, given that digital financing poses risks including increased exclusion, discrimination and inequalities.

By referring to the five catalytic opportunities outlined in the report to harness digitalisation in advancing a citizen-centric financial system, the Task Force believes governments will be able to utilise digitalisation for good.

These opportunities are channelling domestic savings into development financing; enhancing financing for small and medium-sized businesses (SMEs); digitising public financing and making public budgets and contracts transparent; embedding the Sustainable Development Goals (SDGs) into decisions financial and capital markets; and shaping consumption decisions through improved information and choice architecture.

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