## Fintech, Fiber-optics, and Financial Inclusion

_IMF Blog, August 22, 2019_

## Source details

**Canonical URL:** [Fintech, Fiber-optics, and Financial Inclusion](https://www.imf.org/en/blogs/articles/2019/08/22/fintech-fiber-optics-and-financial-inclusion)

## Other formats

- [Markdown version](/en/blogs/articles/2019/08/22/fintech-fiber-optics-and-financial-inclusion/index.md)
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## Bibliographic details
- Authors: The Editors
- Published: August 22, 2019

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### Technological backbone and regional connectivity
- Peoples’ connection to new technology is built on the backbone of electrical and fiber-optic cables running beneath our feet—and under oceans.
- In 2010, most economies that were not connected to the modern, cabled internet could be found in the Pacific.
- By 2020 the region will be almost completely connected.
- Our chart of the week shows the technological transformation taking place in the Pacific island countries, where the completion of submarine fiber-optic cables will facilitate technology-enabled financial inclusion. (Source: Teleography)

### Connectivity and fintech adoption
- The spread of innovative financial technologies, known as fintech, has expanded financial opportunities to more and more people.
- It’s sometimes easy to forget that these new technologies depend on connectivity.
- Faster connectivity provided by higher network bandwidth will accelerate the adoption of more sophisticated fintech applications.
- More advanced, smartphone-enabled fintech applications use a large volume of data and require fast connectivity through higher-bandwidth 3G, 4G, or 5G networks.
- In many Pacific island countries, older and lower-capacity 2G connectivity predominates.

### Expected benefits of higher-network bandwidth
- Higher-network bandwidth will allow Pacific island countries to exploit the benefits of technologies beginning with faster and more efficient payment systems.
- Households and businesses will obtain enhanced and more secure access to finance using modern authentication techniques like biometric identity, combined with other authentication factors, to conduct financial transactions through blockchain-enabled mobile wallets on their smartphones.
- The financial sector will also leverage biometric technology to comply with know-your-customer requirements and use big data to build out their clients’ credit information and assess their creditworthiness.

### Policy applications and government use cases
- Governments could harness technology to improve tax collection, government transfers, trade financing, and land registries.
- A new IMF paper discusses how fintech solutions in the Pacific islands can:
  - complement existing efforts to promote financial inclusion,
  - enhance financial sector development, and
  - increase inclusive growth potential, thereby reducing poverty.

### Publication and attribution details
- Chart of the Week
- Technology
- The Editors
- August 22, 2019

*Source: IMFBlog (views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board). The IMF is an organization of 191 countries, based in Washington D.C.*

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## References

- [https://www.imf.org/wp-content/uploads/2019/08/final3-animated-chart.gif](https://www.imf.org/wp-content/uploads/2019/08/final3-animated-chart.gif)
- [new IMF paper](http://www.imf.org/en/Publications/Departmental-Papers-Policy-Papers/Issues/2019/08/21/Strategy-for-Fintech-Applications-in-the-Pacific-Island-Countries-46862?sc_mode=1)

_Source: https://www.imf.org/en/blogs/articles/2019/08/22/fintech-fiber-optics-and-financial-inclusion_