Financial Inclusion

Leveraging digital technologies for inclusive growth

January 17, 2022

This byline first appeared in Capital Magazine on December 4, 2021 in Mandarin. The above text is an English translation of the byline. 

In the wake of Covid-19, the global digital economy has reached a watershed moment. The pandemic has accelerated a major shift in how businesses and consumers use digital as a tool for commerce and payments, whilst simultaneously reinforcing a bifurcation in the digital economy between those who do and do not have access to digital tools and skills.

In Asia Pacific, the migration toward a more digitized future has been even more pronounced, with a sharp rise in the adoption of emerging payment methods such as digital currencies or mobile wallets, fueled in no small part by the region’s booming e-commerce sector, which grew by 16% during 2020[1].

This rise has coincided with the arrival of Web 3.0, where the convergence of novel technologies such as Artificial Intelligence, cloud computing, augmented and virtual reality, 3D design and more, is allowing us to rethink how tech may be applied in the future, particularly around distributed finance and open banking.

This rapid transformation of the digital economy is, of course, to be welcomed. New technologies are enabling people to move money in a way that is faster, cheaper and more convenient than before, while at the same time providing businesses and consumers with more choices in how they bank and pay.

But at the same time, we need to be cautious. There is a risk that the lack of access to emerging technologies in this region in particular could contribute to a widening financial gap, further excluding the already disenfranchised. As such, the challenge we face is to continue leveraging the clear benefits of the digital economy, while at the same time pursuing a common broader objective: inclusive growth.

Addressing the financial and digital gap

In simple terms, inclusive growth refers to the kind of economic development that creates employment opportunities for all, provides equal access to essential services in education and healthcare and helps reduce poverty.  Financial inclusion – the equal access to financial services – is one of the key pillars of inclusive growth. And in a digital world where much financial activity is being done online, financial and digital inclusion increasingly go hand in hand.

Globally, an estimated 1.7 billion individuals and small business owners lack access to financial services[2]. Closer to home, the story is even more dramatic. In Southeast Asia, for example, half of the population of 670 million remain unbanked, with no access to financial products, while a further 18% are underbanked, lacking access to anything other than a bank account[3].

Compounding this financial gap in the era of Web 3.0 is the fact that nearly half of the world’s population is automatically denied entry to the emerging digital economy. According to a 2021 United Nations report[4], 3.7 billion people still lack access to the internet. In developing countries, more than 80% of the population are still offline.

This digital gap has serious consequences for economic development. We can see this in the example of small and medium-sized enterprises (SMEs). These businesses form the backbone of the economy in Asia Pacific, making up more than 96% of all businesses. In Hong Kong alone, there are over 340,000 SMEs, employing around 45% of the private sector workforce. However, a large number of these businesses are still excluded from the digital economy, whether due to poor online infrastructure, low levels of digital literacy or lack of access to capital.

Technology solving real-world problems

How then can emerging technologies help bridge this gap and contribute to inclusive development?

To begin, we should be careful not to frame technology by itself as a panacea. Technology is meaningless if it doesn’t solve the real problems faced by people and businesses, or if those in need cannot fully access or use it. We should see technology as something that enables a solution, rather than being the solution itself.

Key to promoting inclusive growth will be to increase access to digital tools and platforms, as well as providing people with the digital literacy skills they need to best make use of the technology. At Mastercard we have committed to connect 1 billion people to the digital economy by 2025[5]. Our aim is to maximizes technology and partnerships to deliver aid, insights and access to businesses and communities.

Ultimately, while technological progress and the evolution of the digital economy should be celebrated, it is how we make use of that technology to overcome issues such as financial and digital inclusion that will matter most. As we hurtle towards a more digital, Web 3.0 era, we need to continue to find the technology and use cases that include new segments, improve the consumer experience, and truly enable people to live a more equitable life. 


[1] Fresh Research reports and Daily Fintech briefings. E-commerce in the Asia Pacific region will grow by 16% in 2020 From Forrester - Fresh Research reports and Daily Fintech briefings. [online] 

[2] United Nations | UNSGSA Queen Máxima. Financial Inclusion. [online]

[3] Macquarie. Delivering digital financial inclusion in Southeast Asia | Macquarie Group. [online]  

[4] With Almost Half of World’s Population Still Offline, Digital Divide Risks Becoming ‘New Face of Inequality’, Deputy Secretary-General Warns General Assembly | Meetings Coverage and Press Releases. [online] 

[5] Mastercard builds on COVID-19 response with commitment to connect 1 billion people to the digital economy by 2025. [online]