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Social Innovation through FinTech - Shantanu Bhagwat

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Slides from my talk at FinSum, Tokyo (Sept '16)

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Social Innovation through FinTech - Shantanu Bhagwat

  1. 1. 1 Shantanu Bhagwat @Sh4ntanu 21st September ‘16 FinTech Summit, Tokyo Social Innovation through Fintech aka Fintech in Development 1
  2. 2. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles  The world of “micro” and p2p  Blockchain and the sharing economy  The dawn of “cashless”  Q & A 2
  3. 3. Social Innovation through Fintech  The Opportunity with the "unbanked" 3
  4. 4. 4 Percentage of Total Adult Popular Not Using Formal/Semi-Formal Financial Services
  5. 5. 5 Things are getting better… 5
  6. 6. 6
  7. 7. 7 …but not enough 7
  8. 8. Source: Global Findex 2014, World Bank, Bill & Melinda Gates Foundation 8
  9. 9. Guess which regions are shown here… 9Source: Global Findex 2014, World Bank, Bill & Melinda Gates Foundation
  10. 10. 10Source: Global Findex 2014, World Bank, Bill & Melinda Gates Foundation
  11. 11. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles 11
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  17. 17. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles  The world of “micro” and p2p 17
  18. 18. Water ATMs: 24x7 pay-per-use 18 • 25m people lack access to drinking water • 1600 deaths daily due to acute diarrhoea • 700 hrs wasted annually on collecting water
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  23. 23. p2p lending minus the intermediary… 23
  24. 24. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles  The world of “micro” and p2p  Blockchain and the sharing economy 24
  25. 25. Building Trust in the Sharing Economy.. “…we believe blockchain could help accelerate the adoption of P2P lodging and generate $3 - $9 billion in incremental revenue opportunity through 2020” 25Source:” Profiles in Innovation: Blockchain” report, May 2016, Goldman Sachs
  26. 26. Building Trust in the Sharing Economy..  The blockchain, an emerging technology, replaces the need for third-party institutions to provide trust for financial, contract and voting activities. o …Assets can be shared, creating not just new efficiencies but also whole new business models and opportunities for social self-organization.  Expected Tipping Point: 2027 26Source: World Economic Forum
  27. 27. From Paper-based, manual processes  Online, real-time verification 27Source: Fintech 2.0, Santander report
  28. 28. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles  The world of “micro” and p2p  Blockchain and the sharing economy  The dawn of “cashless” 28
  29. 29. 29 The cashless economy Research by Westpac Bank predicts Australia will be a fully cashless society by 2022 – just six years away. Already half of all commercial payments are now made electronically.
  30. 30. 30 But still some way to go…
  31. 31. But still some way to go… 31
  32. 32.  Faster transactions, lower cost and less room for error  Increased transparency  Easier access to financial services  Reduced leakages in subsidies and wages  Better monitoring of financial transactions (reduced risk of illegal money flows) 32  Still lags cash on ease of use, convenience, affordability, access (proximity) and security (incl. perceived security)  Loss of privacy  Increase risk of fraud and cybercrime  Risk of increasing impulse consumption The cashless economy
  33. 33. Is cashless really good for the poor?  Poor people are the ones who most use cash…  Are they also the ones that most ‘need’ cash?  Can they be better served by digital means? 33
  34. 34. Closing thoughts  Massive opportunity for fintech to be a powerful force in development and affect fundamental transformation  …but can be a double-edged sword o may exacerbate lack of access to products and offerings, creating further inequality o increases risk of financial fraud, particularly for the most vulnerable  Some evidence of “leapfrogging” in the developing world  “Financial inclusion” remains a common concern across regions 34
  35. 35. Social Innovation through Fintech  The Opportunity with the "unbanked"  Nudge, behavioral change and non-financial risk profiles  The world of “micro” and p2p  Blockchain and the sharing economy  The dawn of “cashless”  Q & A 35
  36. 36. Contact me @ Shantanu Bhagwat, Venture Partner LGT IV - Impact Ventures UK Shantanu.Bhagwat@lgtiv.com @Sh4ntanu ImpactVenturesUK.com 36
  37. 37. Disclaimer  The thoughts expressed in this presentation are personal and do not necessarily represent the views of firms or organisation I am associated with  Images of products/services offered by different companies have been taken from website screenshots solely for the purpose of illustration and information  Mention of such companies (or their products, services) does not imply endorsement or promotion of their offerings  The main purpose of this presentation is to increase awareness about the opportunity for financial technology to positively impact global developmental challenges  Please do not make copies or otherwise distribute this content without express permission from me 37

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