BY HAFTU GEBREZGABIHER
Digital Finance Service Group-Ethiopia will hold the first Digital Finance Fair in Addis Ababa next week, as it has been announced by the group on Wednesday October 2022.
The vice president of the group, Nael Hailemariam, said in a press brief that about the event that the conference will be held next week in Addis Ababa, and he also stated that it is an opportunity to promote new digital products and services, create working relationships and experience sharing.
The vice president stated that the event is aimed at bringing together all industry actors, banks, microfinance institution, other agents in the networks, payment service providers and other international development organizations engaged in digital financial services will displays their services and products at the fair.
Endeshaw Tesfaye, head of digital finance at the United Nations Capital Development Fund, for his part said that the forum can help Ethiopia’s digital economy and highlight digital transformation.
The head pointed out that financial service organizations have a significant role to play in developing the sector through cooperation.
According to Nael, in the two-day fair, the will also be events including panel discussions from various presenters that can be share their knowledge and experiences in the sector. “More than 40 institutions engaged in digital finance will be participating in the event.”
The event was organized in collaboration with the United Nations Capital Development Fund and it is expected that senior government officials will be attending on the day.
The experience of the European Commission in digital financing stated in its regulatory legislature that embracing digital finance would unleash innovation and create opportunities to develop better financial products for consumers, including for people currently unable to access financial services. It unlocks new ways of channelling funding to the businesses, in particular SMEs.
Boosting digital finance would therefore support economic recovery strategy and the broader economic transformation. It would open up new channels to mobilise funding in support of the Green Deal and the New Industrial Strategy for Europe.
“As digital finance accelerates cross borders operations, it also has the potential to enhance financial market integration in the banking union and the capital markets union, and thereby to strengthen Europe’s economic and monetary union.”
A strong and vibrant European digital finance sector would strengthen Europe’s ability to reinforce our open strategic autonomy in financial services and, by extension, our capacity to regulate and supervise the financial system to protect Europe’s financial stability and our values.
Digital finance is the delivery of traditional financial services digitally, through devices such as computers, tablets and smartphones. Digital finance has the potential to make financial services accessible to underserved populations in areas that lacked physical infrastructure for these services, defined by many.
Globally, sixty-nine percent of business leaders say digitalization initiatives are accelerating, and most expect digital technologies to dramatically transform their industry by 2026, research done by Gartner.com finds.
These pressures meet at the Chief Finance Officers (CFO), who now faces a critical dual mandate: Lead the finance function through a digital transformation and enable the organization to accelerate digitalization.
The Gartner global team of over 2,200 experts has unparalleled access to the latest digital and technology trends shaping finance leaders and their organizations. This exclusive new Digital Future of Finance research is fueled by our understanding of how digitalization trends are impacting the future of finance — and the progressive solutions that leading CFOs are using to deliver digital transformation that enables sustainable growth. Through the months ahead, we will continue to deliver cutting-edge digitalization insights that will help to lead your finance function into the new digital era.
Benefits of digital financing
According to the WB in its projection at the World Development Report 2016, more than 2 billion people have no access to any financial services. Overall, only about 59 percent of men and 50 percent of women in developing countries have an account at a regulated financial institution. Women, the poor, and small businesses often rely on informal financial services, even when they receive public transfers or remittances. Digital payment systems help overcome barriers to accessing financial services.
Mobile money schemes, in particular, allow people who own a phone but do not have a bank account to make and receive payments. In the right environment, these systems can take off and reach massive size rapidly (figure S2.1). Digital payments can reduce costs to recipients.4 For instance, farmers in Niger realized time savings for spending in a local economy or as a means of exchange in computer games. Digital currencies are both a new decentralized payment scheme and a new currency. Such schemes record transactions in a publicly visible ledger.
Most digital currencies, including Bitcoin, are cryptocurrencies because they use cryptographic techniques to ensure secure validation of transactions. To get a sense of the magnitude of digital payment flows, consider this: In 2014, the volume of Bitcoin transactions worldwide was about US$23 billion; for mobile payments on M-Pesa in Kenya, it was about US$24 billion; for the online payment platform PayPal, it was US$228 billion; and for the credit card issuer Visa, it was US$4.7 trillion.
The financial sector is transaction-intensive and has always been at the forefront of adopting new technology. Automation has led to a significant reduction in financial transaction costs. This has spawned innovations, such as automated credit scoring using advanced analytics and massive amounts of data. Automating processes allows new, so-called fin-tech firms to offer services often at lower costs than traditional providers, including money transfer across borders, the report adds.
THE ETHIOPIAN HERALD FRIDAY 14 OCTOBER R 2022
