Cover page

Table of Contents
Introduction.....................................................................................................................................3
Project I............................................................................................................................................4
Bangladesh SME Corporation Ltd....................................................................................................4
Questionnaire..................................................................................................................................5
project 2...........................................................................................................................................6
Digital transformation into financial services..................................................................................7
Impact on Financial Services Price Chain.........................................................................................8
Addressing financial sector issues:................................................................................................11
Economic Impact:..........................................................................................................................13
Directed financial assistance.........................................................................................................13
Public programmes........................................................................................................................14
Contactless payments....................................................................................................................17
Crowdfunding................................................................................................................................17
Digital currencies...........................................................................................................................18
Weak infrastructure:......................................................................................................................19
Conclusion......................................................................................................................................19
References.....................................................................................................................................20
Introduction

Small and Medium Enterprises (SMEs) play a major role in most economies, especially in
developing countries. SMEs are responsible for most businesses worldwide and are important
contributors to job creation and global economic development. They represent about 90% of
businesses and more than 50% of employment worldwide. In emerging economies, formal SMEs
contribute up to 40% of national income (GDP). This number is significantly higher when
unofficial SMEs are included. According to our estimates, 600 million jobs will be needed by
2030 to absorb the growing global workforce, making SME development a high priority for
many governments around the world. In emerging markets, most formal jobs are created by
SMEs, which create 7 out of 10 jobs. However, access to finance is a major barrier to SME
growth, the second most cited barrier faced by SMEs in emerging markets and expanding their
business in developing countries.

SMEs are less likely to get bank loans than large corporations; Instead, they rely on internal
funds, or cash from friends and family to start and run their enterprise. The International Finance
Corporation (IFC) estimates that 65 million companies, or 40% of formal micro, small and
medium enterprises (MSMEs) in developing countries, need insufficient funding of 5. 5.2 trillion
per year, equivalent to 1.4 times the current. Global MSME Debt Level. East Asia and the
Pacific account for the largest share of the total global financial gap (46%), followed by Latin
America and the Caribbean (23%) and Europe and Central Asia (15%). The gap volume varies
considerably from region to region. Latin America and the Caribbean and the Middle East and
North Africa regions, in particular, have the highest proportion of financial gaps to potential
demand, at 87% and 88%, respectively. About half of formal SMEs do not have access to formal
loans. The funding gap is even wider when considering small and informal initiatives.

Project I

Over time, a significant transformation of the SME sector has taken place in Bangladesh through
various government and non-government initiatives. It is estimated that 7.5 million MSMEs
(including cottages) constitute a significant component of economic enterprises, accounting for
more than 97% of all enterprises in Bangladesh, and the share of SMEs in GDP in the 2015 ADB
survey is estimated to be about 25% and correctly estimated. It could be more.
Bangladesh SME Corporation Ltd

Bangladesh SME Corporation Limited (BSCL) is an alternative finance company focused on

bringing innovative finance and technology to the market to strengthen the micro, small and
medium enterprise (MSME) sector. BSCL maintains an extensive database of MSMEs in
Bangladesh by providing financial support, predictive analysis and survey and provision of
value-added services to entrepreneurs. This is done through the facility of financing from formal
and informal channels.

BSCL was founded on the principle of inclusive growth through the private sector by Wall Street
veterans and a group of local Bangladeshi partners. The BSCL team has conducted extensive
research and surveys to identify the gaps in MSME financing in the country and the problems of
available forms of financing. The absence of a strong risk assessment and monitoring
infrastructure has made it difficult to accurately measure MSME loan risk due to high interest
rates, strict collateral or guarantor requirements as well as high rates of non-performing loans.
One size fits all types of financing methods, not suitable to meet the unique requirements of
MSMEs of different regions and sizes of the country, the conditions attached to the funds
available through refinancing, makes it difficult to find a match for an MSME client. . MSMEs,
on the other hand, are basically at a stage where they need support / capacity building to achieve
and maintain proper regulatory compliance, financial management and planning and auditing.
These results have resulted in the development of our software-based management information
system that has created features to automatically evaluate and monitor our SME client risk based
on regular transactions, as well as to perform annual audit functions on behalf of the client. The
automation of risk assessment and monitoring translates at a lower cost and therefore eliminates
the need for lower interest and collateral.

Questionnaire

1. What is the policy of sick leave at this time? How sick days do you get there?
2. If you leave SME, what will be the reason?
3. What advice would you give to SME management to prevent others from leaving?
4. Why did you quit your job at SME?
5. How is the work environment and culture in SME?
6. What role can SMEs play from home during the outbreak of covid-19?
7. How did SME react to the outbreak of covid-19?
8. How is the interview process in SME?
9. What questions did they ask during your interview on SME?
10. How important is good management for a small business?
11. How can a small business be successful?
12. Do small business owners have questions?
13. What legal aspects do I need to consider?
14. Do I have what it takes to own / operate a small business?
15. Do I have any other financial responsibilities for employees?
16. What kind of security measures should I take?
17. What are the financing options for a business?
18. How much do you need to borrow?
19. How do I set up a proper record-keeping system for my business?
20. Is marketing involved?
21. Do I need a financial statement?
22. What are my market prospects?
23. What about advertising?
24. Are the locations better than Monday?
25. Shop (plant) and equipment is better to rent or buy?
26. How do I know about suppliers / producers / distributors?
27. What should I know about accounting and accounting?
project 2

The digital transformation that has propelled industries from retail and media to transportation
and from trade to commerce is now shaking the financial services industry. This was inevitable,
because ubiquitous computing power, extensive connectivity, mass data storage, and advanced
analytical tools could be easily and efficiently applied to financial services. After all, money was
already widely created (though not exclusively) created, used, stored, processed, and distributed
electronically. Immediateness and personalization have become the norm for consumer products
and services. Consumers have quickly become accustomed to shopping at their fingertips,
accepting useful recommendations, selecting customized products and enjoying the delivery of
almost any item directly to their front door. Businesses that fail to adapt quickly to these
technological advances can fail dramatically, and many have already done so, including Tower
Records, Border Books, Blockbuster Videos, and countless travel agents and brick-and-mortar
retailers. The new customer expectations also apply to financial services. Technology has
transformed into business-to-business and business interaction, enabling redesign of design,
production, marketing, delivery, and service functions through distributed supply chain,
freelance design, outsourced manufacturing, and contract warehousing and distribution. These
rearrangements are mediated by online marketplaces and distributors and are aided by back-end
support activities and data analysis that together lead to better risk assessment, faster fulfillment
and more efficient customer service. Similar disruptive market innovations and restructured price
chains are now emerging in the financial services industry. 1 This poses a distinct challenge for
responsible providers such as banks, finance companies, microfinance institutions and insurance
companies, as financial technology-or fintech-innovators enter their markets. Those responsible
can also benefit from these developments, which will enable them to expand their financial
reach, launch new products and services, and serve customers more efficiently by installing new
technologies internally or in partnership with external innovators.

Digital transformation into financial services

Although financial services have been computerized for decades, with products such as retail
brokerages using digital channels for nearly 20 years, a more radical transformation of the
industry has been delayed due to the market advantage of traditional financial services providers.
These include established consumer confidence, regulatory barriers to banking and insurance
access, and supervisory procedures that create a bias to internalize all or most of the value chain.

The financial crisis of 2008 eroded confidence in financial institutions, and the regulatory
response to the crisis, which increased capital requirements and compliance costs, made lending
more difficult and costly for banks. Has enabled non-banks to improve. They can offer financial
services more cheaply and efficiently than those responsible for the legacy infrastructure and
regulations. Also, the digital transformation of other industries has made consumers more
confident and comfortable with technology-based financial solutions. This has increased their
demand for immediate and customized products and services. Some reputable FinTech
companies are meeting the needs of these consumers at low cost, convenient way to transfer
money, borrow and invest. The impact of FinTech on financial services, however, extends
beyond retail and customer-oriented applications and services to include all components of the
financial services manufacturing process. Other industry transformations have shown how
increasing data availability and speed of data transmission can address key issues of contract and
monitoring that determine the level of internalization of organization structures and activities.
For example, the ability to send designs around the world and monitor production quality has
enabled companies like Apple and Nike to differentiate design and marketing from
manufacturing and logistics. Yet commercial banks are still internalizing almost all aspects of
channels, product design, and operations, as well as a fair amount of personal infrastructure (call
centers are an occasional exception, although many such operations were offshore without
outsourcing). The new FinTech entrants can optimize a single link in the financial services
quality chain to provide a bank-betting solution that can connect to the rest of the financial
ecosystem. This could mean providing services directly to users' mobile devices instead of using
bank branches, providing proprietary communication lines using encrypted Internet
transmissions, or avoiding data center costs using cloud computing.

Impact on Financial Services Price Chain

Some FinTechs aim to operate separately from the bank and compete directly. Others give bank
solutions. Virtually all of them need to be connected to other financial services and existing
infrastructure (for example, to transfer funds). And banks, whether they like it or not, will be
dragged into this era of restructuring by market power and, in some cases, government
interaction orders. Where as sole proprietorship banking systems once disconnected from
external solutions, interoperability will enable fintechs to become profitable segments of the
banking business

Now mandatory in some judiciary, especially the European Union. 3 The digital transformation
of financial services is likely to result in a significant share of the bank's products and greater
competition with profit risk. Barriers to entry in terms of core bank compliance costs may
increase, but regulators are increasingly willing to deal with non-bank competitors for products
traditionally dominated by banks, and the banking economy has changed. Cloud infrastructure
and mobile channels mean that the provision of financial services no longer requires high-cost
mainframe data centers and branch networks, so costs are more variable. Although businesses
with many large scale or network economies may integrate into specific lines, it is increasingly
easy for niche providers to provide useful solutions in a specific market at the same time and to
be profitable with a much smaller asset base. Fintech banking has gained market share in high
margin slices such as remittances and asset management and technology-enabled Challenger
banks have emerged as serious competitors in several markets.

The restructuring of the value chain is also pushing the boundaries of the industry. SoFi, an
online personal finance company, offers career coaching, while Holvi, a Finnish-based financial
startup, provides bookkeeping services and cash flow tracking. 4 Similarly, data analytics
company Atsora, a Polish provider of SME financial management tools, offers its products to
SMEs through banks and instead uses data to create cash flow based scoring that banks can use
to lend. 5 As the financial services industry becomes increasingly competitive, digestible and
recyclable, innovation will be a key success. Banks that learn to adapt to new technologies, adapt
their products and processes and become more efficient in providing appropriate solutions for
their customers will succeed. In the wake of the global financial crisis and banks' preoccupation
with regulatory requirements, non-bank innovators have led or acted as catalysts for the digital
transformation of financial services.

What is the difference between an emerging market economy? New models in e-commerce,
online media and transportation are entering the developing economy. The transformation of
financial services is also underway — and in some countries technology-driven business models
have outgrown adoption in other industries. Mobile money acceptance is an example in Kenya
and Bangladesh. Nevertheless, most emerging market countries face specific challenges in the
digital transformation of financial services and the development of fintech. The four main
challenges that have affected the digital transformation of financial services in this market
subject to advanced economy are: Low penetration of formal financial services • Low income
and level of financial literacy • Underdeveloped technology ecosystem, • Weak infrastructure.
All of these factors are not equally present in emerging market economies, but they shape the
interaction between the financial services providers of both banks and fintech, as well as between
the two types of financial service providers.

Banking-FinTech Dynamic Development Space: A cross-country comparison to provide more

quantitative comparisons across the country, in Figure 1 we use two indicators as proxies for
these four challenges: We measure formal banking penetration (representing the first two
challenges, and displayed Is) along the y-axis) and Venture Capital (VC) investment GDP
(represents the last two challenges, and displayed along the x-axis). The size of the bubble
corresponds to the approximate number of non-banks in each country. With the average venture
capital intrusion for the interaction of the two variables as the dividing line and the trend line of
the lowest square, we find the four quadrilaterals shown in Figure 1: Quadrant I (upper left):
"Bank dominance" And will probably maintain market dominance. In-sector competition can
create a positive dynamic of service innovation among banks. Examples include Poland's Alior,
Idea and mBank. 7 Only with new local technology ecosystems, innovations from foreign
FinTechs can come. Regulators may want to create an open environment for non-bank access to
encourage competition and innovation of products and services, but bound local banks enjoy the
"home field" advantage.

Quadrilateral II (upper right): "Partnership" These quadrilateral banks are well-connected and
serve the majority of the population. However, strong tech ecosystems will support innovation
by offering new price proposals or taking market share from those responsible. Banks can take
advantage of technology to compete. Some FinTechs will scale themselves, others will partner
with banks for better access to customers, capital, payment systems or other operating assets.
Examples include OnDeck Capital, which has partnered with JPMorganChase for customer
emergence and balance sheets during loan decision and service delivery, and TransferWise,
which markets itself as a bank interceptor when partnering with banks for distribution.

Quadrant III (bottom right): The "technologically dominant" countries of this quadrangle have
built well-developed technological ecosystems, with banks leaving large segments of the market
unfinished. This has created opportunities for non-bank innovators to enter the financial services
market. The regulatory environment and the extent to which it is open to the fintech sector varies
from country to country. This is a key variable in balancing between FinTech and more
conventional banks. China, for example, is relatively open to large technology companies
entering financial services.

Addressing financial sector issues:

From a financial point of view, the interrelationship between money and the real economy, the
starting point is to understand the situation and, from there, to develop appropriate strategies to
prevent or mitigate the financial crisis by minimizing the damage to the real economy. The 2008
crisis arose from a financial crisis. 12 This has an impact on the real economy (as financial
resources become unavailable to support economic activity). These losses in the real economy
have exacerbated the problems in the financial sector (through both liquidity and liquidity).

The Covid-19 coronavirus epidemic that began late in the fourth quarter of 2019. 14 Second, a
geopolitical crisis: the push for oil prices, from the beginning of 2020 to the end of the first
quarter of 2020, continues to get worse. 15 Although the most significant impact of the epidemic
is on humans, the immediate consequences of individualized segregation systems and lockdowns
are felt through supply chains (such as reduced efficiency of factory and logistics networks), and
increasing and more severely through demand channels (i.e. personal and business losses for
costs). And restrictions on certain services (such as travel and hospitality services) worldwide
and locally. Furthermore, uncertainty in terms of homicide (COVID-19) and economic losses
(COVID-19 and oil prices) is drastically eroding trust among economic actors and among them.
The virus spreads in the society. Loss of confidence spreads in the market.

In both cases, the limitations of interaction, in the form of reduced social distance or reduced
economic trade, have short-term consequences. These are also manifested in the potential loss of
confidence in the financial sector, as everyone wants to maximize their access to Cash 16 -
although still mostly in digital form as opposed to physical cash or gold. Unlike in 2008, the
crisis did not originate in the financial sector, but in order to manage the financial sector
efficiently, confidence and assurance in economic aspects is needed among the actors. Both of
these factors are now being challenged because of the economic and humanitarian impact of the
crisis. Trust and certainty are the transmission mechanisms between real economy and financial
markets.

Companies, governments and individuals face potential second-order challenges and these will
have an impact on the financial sector. A weak financial sector will not be able to perform its
role well in financing the real economy, resulting in deterioration of business and humanitarian
situation and possibly starting a bad downward spiral. Intervention needs to be noticed to avoid
such an outcome. We identify four levels of intervention, from macro (infrastructural strain) to
micro (financial health). The first level, from a financial sector perspective, focuses on the
infrastructure of the financial system, especially the financing system and the securities market
(for both companies and the government). One of the biggest concerns is the failure of this core
infrastructure, which is almost completely digital. This digital plumbing is at the core of any
financial system, domestic or international.

It is essential to monitor and ensure crisis resilience of these key infrastructures, as failure losses
in times of crisis can be devastating. For example, both medical and safety personnel, and core
IT staff and tools must be seen as important to the workings of society and should receive
priority treatment. At the same time, market behaviors highlight that in some situations it may be
necessary to stop trading or review the trading halt trigger mechanism. However these should
ideally be done within current parameters (as in the case of stock exchanges) and for a limited
time. Cyber security is also a major source of operational risk and has recently become a major
concern. Before the 16th epidemic, cyber risk was seen as greater than credit and financial risk,
especially as most companies struggled to cope. In the current situation where companies are
rapidly moving employees from secure offices or government networks to home networks, the
chances of potential breaches by malicious actors are significantly increased as well as the risk of
technical failure. We classify these as tech risk.
The second level, from a liquidity perspective, focuses on identifying where liquidity problems
will arise in both the real economy (individuals, institutions, government) and the financial
sector (bank runs, etc.). At the heart of any financial sector are wholesale electronic systems that
must be carefully monitored for pressure from domestic liquidity providers (usually the central
bank). In times of crisis, broad lines of credit from major central banks and support from
international institutions may be essential. This is especially true if consumers follow the rumors
about the impact of the crisis on financial institutions and try to withdraw cash, which triggers a
banking crisis at the top of the health and economic crisis. A similar phenomenon is reflected in
the public sector where widespread and rapid unemployment can lead to "welfare runs" (as seen
in Australia). Yet liquidity supply alone will not ensure demand in the real economy if product
choices are limited (as it will probably be increasing due to state intervention). Where product
choices are limited, extra liquidity can translate into higher prices for a few products available.
This is where new (financial) products can help, as discussed in the section below.

Economic Impact: Digital Channel Maximization Digital Finance offers potentially

important tools to quickly and efficiently provide resources that are most needed by
stakeholders.

In particular, we focus on available strategies and solutions to mitigate economic and

humanitarian impacts. In the current scenario, the economic impact is due to short-term factors
(however, these can, in some cases, turn into structural factors, which will require different
strategies). Digital financial instruments have been able to achieve traditional crisis management
objectives with greater power and accuracy than they have historically been able to do. The data-
driven nature of digital finance empowers policymakers to form and scale stimuli with precision.
The questions are whether the capabilities are mature enough and whether the information is
available, readable and in front of decision makers. Collecting, curating, and monitoring
collected information is a key pillar of crisis preparedness that can be tragically expressed as
missing in the current epidemic.

Directed financial assistance

In times of crisis, people need food, shelter and clothing. As long as the basic market conditions
are still in place and the situation does not deteriorate into riots and looting, trade exchange will
be the only legitimate way to secure such essentials. Digital financial platforms, and especially
digital wallets, can provide quick and accurate funding to those in need. One of the criticisms of
banks in the current COVID-19 crisis in China is their relatively slow response to reducing the
financial burden of those infected with the virus. They have been criticized for taking too much
time to work on credit card payment holidays and corporate loan redistribution. In many
developed countries, it has taken a long time for banks to respond - and they have done so since
the government took the lead. 30 The deadline for these relief measures was "weeks and
months." Since the virus first appeared, China's big-tech companies, Alibaba and Tencent, have
accustomed the Chinese people to fast and customized services in almost all areas of digital life.
We now live in a world of on-demand entertainment and Amazon Prime timeframes. 32 In the
age of instant technology, the response time of banks seems to be too slow for many.

Public programmes

Many governments around the world have announced direct government stimulus packages to
limit the widespread economic woes and to avoid a severe recession. Some of these programs,
such as Australia's "Jobkeeper" programs, are based on granular information that is cross-
referenced with other data points. 34 Most policymakers believe that the epidemic will turn into
a broader economic tsunami without disrupting specific sectors (e.g., travel, hospitality). Many
of the initiatives announced include ensuring adequate liquidity to support the market, building
business and consumer confidence (or at least allaying fears) and stimulating demand. In dealing
with economic impact, the starting point is to identify market constraints and those groups that
may be affected. Adequate calibration is required for effective policies and public programs to
address supply-side barriers to the provision of essential needs that stimulate overall demand in
line with social cohesion (food security, hygiene and medical supplies). These targeted measures
will try to address issues related to liquidity (income, temporary loss of business, etc.) and
solvency.

In addition to the process of monitoring financial and economic conditions, digital finance offers
the possibility to directly target the financial resources of the most affected individuals quickly.
The combination of digital identity structures combined with the widespread availability of
financial and mobile money accounts provides the greatest potential for providing resources
directly to consumers. And providing funding using algorithms, prioritizing various factors such
as age, health, social commitment, professional qualifications, and so on. For the time being, at
least, the politics surrounding such social programs and evaluations appear to be less polarized
and more compromising than in general. Governments, NGOs and international organizations
should try to work with financing, financing and telecommunications providers to utilize the
resources available in terms of speedy target delivery. The desired level of effectiveness of
checks mailed over several months is not really likely.

One of the short-term tools for SMEs is the ability to unlock future income by looking at invoice
factoring solutions. However, this requires digitization of invoices, which may not be common in
developing markets. Moreover, in developed countries, many businesses have lost all future
revenue due to closing client orders. 37 Another technological approach that relies heavily on
current and accurate information includes strategic cash injection, which avoids widespread
unemployment, damage to infrastructure, and deterioration of workforce, thus preparing for a
quick kickstart as the health crisis subsides. For example, states may rely on tax authorities to
trigger reverse transactions based on final VAT, corporate tax and income / salary tax records.
Certain types of businesses may be suitable for crowdfunding (see below). Governments that
have at different times restricted the use of crowdfunding platforms in their jurisdiction may
formally support the appropriate campaign by declaring their conditional regulatory blessing. 1.
The importance of digitally identifying people will continue to grow by connecting to the official
repository of digital identity information. It can provide governments with a way to pursue and
implement remedial policies, especially in the context of direct financial assistance. The financial
crisis of 2008 has resulted in substantial loss of resources in some jurisdictions through
misallocation of incentives to dead or non-existent citizens. Digital identity verification and
authentication should ensure that only motivated recipients receive incentive payments. The
threat of fraud and identity theft can be greatly reduced by strengthening and supporting digital
identity infrastructure. 39 However, it is important to remember that the focus should be on
authentication and verification of an identity through a digital channel, not created separately.
Digital identity "or avatar.

Behavior Management Unusual grocery store panic that has engulfed many developed
economies is in many cases the product of digital dissemination of information. The issue of
'fake news' and popular misinformation through social media has been an issue of international
significance for several years.

Social distance and quarantine policies adopted in many parts of the world have also greatly
increased in e-commerce. In the first quarter of 2020, the use of digital platforms to facilitate
shopping, payment and delivery of all kinds of goods increased rapidly, and in the second
quarter, it continued to grow. Depending on how long these policies last and how well the
delivery services work, they will trigger a change in behavior and purchase patterns. A 2010
study by University College London of London, focusing on human psychology, concluded that
it takes 66 days to form a habit. As digital finance platforms play a more prominent role in
people's lives throughout this crisis - there will be some of these behavioral changes. Digital
purchasing platforms are being used to limit buyers' freedom to buy in bulk by implementing
quantitative quotas. The growth and sophistication of app-based and online budgeting tools has
significantly improved the potential for identifying and classifying financial transactions in
recent years. Open banking platforms that provide customer banking information to third parties
can also use aggregate data to identify purchasing behavior and to identify panic and implement
quotas. With the development of Artificial Intelligence (AI) analysis, these sources of
information can be easily linked to other data sets (e.g., social media communications) to provide
a more specific measure of people's perceptions.

Extensive use of behavior management in the form of lockdowns, freedom of movement and
masks imposed by the government may last longer than strictly necessary. If people do not
believe in the rationality of behavior management protocols, as seen in many parts of the world,
a reaction may occur. So behavior management needs to be done in an open and transparent way
where people understand and accept his reasoning.

Information and trusted information are the lifeblood of the digital economy. It is important to be
able to identify, access and use information from public health to criminal activity. Like war, in a
crisis (especially this crisis), real information can mean life or death. A well-funded, national
coordinating body - such as a Health Stability Board - established as a crisis management tool
can ensure timely information exchange - especially between the public and private sectors.
Emergency government powers can be used to overcome data privacy and security barriers and
to intensify the exchange of information on health and financial matters. Information sharing
policy and greater digital governance of information should be established. The intelligence of
the masses is probably most evident in the context of mass consumer behavior. Consumers
provide real-time hints of public buying behavior trends and fashions and can easily, highlight
public panic and complete panic. Using digital financing tools to gather purchasing information
(for example, medical supplies or toilet paper) can help identify emerging panic.

In addition to health risk management, digital finance provides tools for monitoring potential
epidemic outbreaks. It also provides individuals, healthcare providers, and others with the means
to manage financial resources that are necessary for their performance and other possible
processes for financial response, especially in developing countries but in other contexts ৷ 49
Telecom and search data can be particularly valuable. Beyond that, the ability to remotely
provide medical services and counseling ("telemedicine") is directly related to the availability of
communication infrastructure (especially the Internet and mobile but fixed lines) and electronic
payment mechanisms to government, individuals, businesses, etc. And, of course, e-tokens can
be used to distribute scarce products to those who need them most.

Insurance

The availability of insurance (medical, travel, pets) through online platforms has increased of
late. As CoVID-19 spread, so did the demand for insurance. Significantly, however, the
declaration of COVID-19 as an epidemic has invalidated many existing travel insurance policies
and left many more in the gray area for claims. To reduce the expected hassle and facilitate the
settlement of insurance-related financial disputes, online dispute resolution services such as the
private UK service 'Resolver'53 - as well as other public and private online dispute resolution
platforms can play an important role in recovery. Process (especially in light of emerging and
possibly ongoing social distance guidelines).

Contactless payments

Concerns about the spread of the virus are changing the rules of social communication. People
around the world have been instructed to reduce physical contact in their daily lives in order to
reduce its spread. Digital wallets that support contactless payments and other types of non-
communicative transactions are proving to be more convenient and faster and healthier than
traditional cash or card transactions. 57 The decades-old drive towards a cashless society now
has even more compelling drivers. This is a mature field for further, and ongoing, behavioral
change.

Crowdfunding

Crowdfunding initiatives (and the platforms that support them) are emerging as 58 critical
decentralized lifelines 59 at a time when the power of centralized government control is being
rigorously tested. Members of the public who might otherwise feel powerless in the face of the
virus have pledged millions of dollars for COVID-19-related crowdfunding causes - including a
high-profile crowdfunding campaign launched by football superstar Zlatan Ibrahimovic, with
less than 60 virus-related jobs. High-profile reasons about people facing economic hardship due
to loss.

Digital currencies

The decentralized nature of many cryptocurrencies can mitigate the risk of operational
disruption due to a severe outbreak in a specific area. In this context, the benefits of a
decentralized operational structure can be far greater. 68 However, this did not stop the price of
Bitcoin from becoming extremely volatile, denying its reputation as a digital "safe haven" for the
most well-known cryptocurrency. .

Of course, one of the more controversial innovations where digital finance and the COVID-19
crisis have overlapped is the development of the so-called "Coronacoin" 70 crypto-currency that
was announced in early February. The idea behind the token is that the supply of money will
decrease every 2 days at the rate associated with the death caused by the virus. It will raise the
price of the currency, rewarding investors with returns. The total supply of tokens is based on the
world population and 20% of the proceeds will be donated to the Red Cross. What makes the
currency useful, or where it can be used, remains unclear, and many (including Forbes
Magazine) have identified cryptocurrency as a Macabre gimmick. The currency has lost 83
percent of its value since its inception in 1971 and has had no significant impact.
The COVID-19 response is essentially a large-scale social experiment. Shock is dominating
people's attitudes towards more online and digital options. Once the crisis is resolved, it is very
likely that the habits, cost savings and convenience factors revealed to the vast majority of
consumers through this crisis will lead to lasting behavioral changes. There are examples. After
the 2008 crisis, financial institutions began supporting video conferencing meetings for cross-
border travel as part of cost-cutting measures. Banks invested in the necessary hardware and
people were encouraged to use these (then - new) tools. Ten years later, video conferencing is the
norm for many meetings around the world, and in this unprecedented time many sectors (such as
education and shareholder meetings) are being maintained. With digital infrastructure already in
place, the COVID-19 outbreak could potentially be a catalyst for a faster adoption of digital
financial services-dependent activities. Meanwhile, the intelligent, creative use of digital media
offers a lot in the battle to overcome the social, economic and some health consequences of the
crisis. From a personal point of view, as individuals, each of us must focus on maintaining our
own health and the health around us. We also need to focus on understanding the truth and
analysis in the face of panic and rumors. Take care of your health but also think, think carefully
about the information you are working on and think carefully about your activities from the
perspective of your friends and family. Take time to arrive. It always helps.

Weak infrastructure:

Although advanced thinking regulators in some countries have created a favorable environment
for digital financial services, they offer a flexible regulatory environment (Kenya) that allows the
development of non-bank infrastructure, or invest in critical identity and payment infrastructure
and a tiered licensing system (India). , There is a lot of work left in many countries. Where
general-purpose financial infrastructure is lacking, existing banks' networks and infrastructure
maintain significant value. With the new infrastructure coming online, the opportunity for banks
to take advantage of their position to already have payments, identities and trust assets. Banks
can leverage their capital, customer base and brands for rapid expansion of partnerships with
Fintech, which can help fill gaps in banks' channels, product sets and processing capabilities.
Conclusion

Although the final structure of a digitally transformed financial services sector may take different
forms, the extent to which banks continue to play a role will depend on the combination of initial
status and adaptability. Banks can play an influential role in markets where the formal banking
system is well-integrated and provides reasonable services to the masses even where technology
ecosystems can support significant fintech attacks. In markets where the banking sector lags
behind, there are more opportunities for FinTech to take over functions and market share. In
countries where the tech ecosystem is relatively weak, with only isolated solutions such as
mobile money technology companies, banks have so far been able to catch up. Kenya is an
example where a comprehensive fintech infrastructure for financing was set up by a
telecommunications company, but the financial services value-added banks have reclaimed.
Nevertheless, an array of new entrants can transfer a portion of financial services outside the
banking sector by utilizing technology infrastructure.

Significant innovations outside the banking system, a large number of marketplace lenders have
emerged, and a number of technology companies have made significant inroads into financial
services, particularly in finance and investment. India has also seen the proliferation of new
lenders and repayment offers. Although market lending and wallets may not survive in these
countries, China's major technology companies are in a good position to play an important role
in advancing financial services. In India, banking regulators have taken a more conservative
approach: innovators must either partner with the bank or obtain one of the now available tiered
licenses. Convergence can result. With the launch of infrastructure for digital financial services,
banks are increasingly partnering with innovators and even technology players seeking payment
banks or other licenses.

Across all the quadrangles of our mapping, technology enables us to reach out and rearrange the
supply of goods in the financial sector like any other industry. Market position and regulatory
privileges provide a window where banks can lead in the provision of financial services in the
digital age, but this window will remain open until they innovate to deliver what customers need.
Banks do not need to perform these innovations on their own. Banks have the opportunity to
learn from experiences in the automobile, electronics, retail and other industries where product
design, production, branding, marketing, delivery and services no longer fit into a single
corporate entity, but a value chain has been created. To optimize the best solution on each link.
As the market develops, more and more will move to Quadrant II, where banks will partner with
technology innovators to provide an ever-expanding customer base with improved products and
services.

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Thomas Rehermann,

Senior Economist, Thought Leadership, Economics and Private Sector

Development, IFC (trehermann@ifc.org)

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