By Dr. Nir Kshetri
This paper examines how recent advances in computing and telecommunications technologies are promoting financial inclusion in the Global South by dramatically transforming the way the financial industry operates. The emergence of financial technology (FinTech) companies based in the Global South and their roles in pro- moting financial inclusion in their respective regions is discussed. A key emphasis of the paper is internationalization of Southern-based FinTech companies and evolving South-South Cooperation in the FinTech arena.
Special consideration is given to the use of Big Data in assessing, evaluating and refining the creditworthiness of potential borrowers as a crucial mechanism underlying this transformation. Various categories of personal financial and non-financial information being used by Big Data companies as proxy measures for a potential borrower’s identity, ability to repay and willingness to repay are explored. The paper hopes to advance the understanding of how artificial intelligence (AI) applications have transformed the financial industry landscape.
Another theme of the paper is the potential role of blockchain-based financial technologies and cryptocurrencies to improve access to and affordability of financial services for low-income people and small businesses. The argument is made that blockchain has the technical potential to serve the needs of unbanked and under- banked populations.