Finance's power for good
Finance is so much more than money, investments, capital markets and economy. Finance is power, granting people independence and freedom, and even has the power to fuel innovation for the good of mankind.
That said, recent history and the financial crisis of 2008 showed us how destructive finance can truly be. Emerging from trading sheets, causing ruptures throughout the global economy, the financial crisis impacted everyone from cereal farmers in Africa to Vietnam and Bangladesh’s textile industry. It called into question the divide between rich and poor, and brought to light issues with the concentration of wealth and how that affects our interconnected world.
However, whilst finance can be destructive it is also essential for communities to thrive. How can a farmer protect his crops from future price fluctuations without finance? How can an entrepreneur look at expanding her business without finance? Financial services enable people to grow, to develop and to become financially independent.
I grew up in an agrarian village as the son of a banker who worked for the largest bank in India. My father spent a lot of time in his banking career with the ‘Agricultural Development Bank’ arm of the business. One thing that left an ever-lasting impression on me was his relentless pursuit to make finance accessible. I remember watching him waking up in the early hours of the morning to visit farmers. He would discuss their needs, check the progress of their crops and how they were faring against the capital invested by his bank. Access to financial services was limited and the gap between banks and their consumers made it hard for them to succeed.
Today’s technology has enabled banks and their communities to come together. Through mobile and internet access and digital native banking, our world is making moves toward addressing inequalities in society. Digital and neo technology-based logistics (e.g. – blockchain) and trade finance are funding global trade more efficiently than ever before. Students that wish to pursue higher education in international universities are seeing their funding cycle reduced substantially with connected banking experiences and microfinance loans are giving businesses in need the power to carry on. Finance with an efficient mix of technology is reconnecting the communities it once destroyed.
I am proud to work with Finastra in their journey to redefine finance for good. Finance for good is no longer just a CSR activity, but is instilled in the DNA of the company. For example, in Kenya, Finastra is piloting a novel initiative called Trust Machine. Trust Machine takes an holistic approach to microfinance consisting of better modelling and risk forecasting, financial education and the synchronization of balance sheets of both the borrower and the lender. Experts in statistics and modelling from the University of Leeds and ETH Zurich collaborated to build advanced algorithms backed by extensive data range to recommend the right products for the customers. This is just one instance where we can see the power of financial technology—and so much more is possible. I am proud to be a part of a company in which all employees play a past in the journey of continuing to redefine finance for good.
Discover more in the Redefining Finance series