Governments’ interest and investment in financial technology (fintech) solutions is accelerating.
Artificial intelligence; blockchain; cyber-crime and security; data; digital currencies; fraud, error and debt; ID verification; open banking and open finance; and payments – these are all topic areas related to fintech where governments worldwide are exploring possibilities and investing in solutions.
Public authorities across the world are increasingly looking to champion their fintech industries and encourage fintech solutions.
Central and local government authorities, as well as regulators, central banks and other publicly-funded institutions, all have an interest in the digitalisation of economies and the opportunities and challenges raised by digital money.
Embedding, supporting and regulating fintech
Global Government Fintech identifies three main ways in which public authorities have an interest:
- Buying fintech services and/or embedding fintech solutions into their operations to improve what they do and deliver better services.
- Creating structures to encourage fintech: for example, regulatory sandboxes or open banking authorities – motivations include boosting innovation and competition in financial services.
- Regulating fintech – as private-sector fintech growth continues, regulators need to ensure they understand the risks and concerns.
Global Government Fintech is building a growing library of independent editorial content illustrating the trend. Examples include:
‘Governments turn to fintech in fight against financial fraud’ (30 November 2021): panellists at a Global Government Fintech webinar discuss the merits of government use of fintech solutions – including artificial intelligence – to reduce manual processes, undertake due diligence, and ultimately, to identify and prevent fraud.
‘HMRC reaches milestone as £1bn in UK tax paid through open banking’ (29 September 2021): our news story reporting that at least £1 billion (about $1.32bn) in tax – via more than 500,000 individual payments in total – had been paid using open banking technology since it engaged the company (Ecospend).
‘Germany’s public sector and fintech: game on?’: our analysis (18 May 2021) of the extent to which the public administration of the European Union’s most powerful member state is exploring fintech solutions.
‘Fintech has “almost infinite” potential for governments: Lord Holmes’ (3 March 2021): our report from an event during which a member of the UK House of Lords highlights fintech’s potential to help governments to improve the delivery of citizen services.
‘ECB eyes “cutting-edge” tech as it launches first SupTech procurement’ – our news story (18 January 2021) on the European Central Bank (ECB)’s plans to significantly step up its investment in innovative technology, having kicked off its first ‘SupTech’-specific procurement with a planned spend of more than £200m (SupTech the use of innovative technology by supervisory agencies).
Governments moving at different speeds
Public authorities’ motivations and pace of adoption differs. As an example from the fast-moving world of digital currencies, emerging economies have been enthusiastic adopters of central bank digital currencies (CBDCs) as a means to help financial inclusion (see our content from the Bahamas and Eastern Caribbean), whereas authorities in the Eurozone and UK are stepping up their investigations into potential digital versions of their currencies while so far stopping short of committing.
Global Government Fintech covers news, trends, analysis and engages with personalities across the public sector around the world regularly and deeply, meeting the needs of the experts across government faced with transforming and innovating in this area.