Overview of digital finance

What is digital finance?

Digital finance is the term used to describe the impact of new technologies on the financial services industry. It includes a variety of products, applications, processes and business models that have transformed the traditional way of providing banking and financial services.

While technological innovation in finance is not new, investment in new technologies has substantially increased in recent years and the pace of innovation is exponential. We now interact with our bank using mobile technology. We make payments, transfer money and make investments using a variety of new tools that were not there few years ago. Artificial intelligence, social networks, machine learning, mobile applications, distributed ledger technology, cloud computing and big data analytics have given rise to new services and business models by established financial institutions and new market entrants.

All these technologies can benefit both consumers and companies by enabling greater access to financial services, offering wider choice and increasing efficiency of operations. They can also contribute to bringing down national barriers and spurring competition in areas such as

• online banking, online payment and transfer services
• peer-to-peer lending
• personal investment advice and services

The financial services industry has been influenced by innovative technology, which can benefit both consumers and companies by giving a greater access to financial services, offering wider choice and increasing efficiency of operations.

Numerous opportunities involve also risks and challenges, which require monitoring and regulation. Therefore, the Commission has put further many initiatives to embrace the innovations, preserve market stability and integrity, and protect financial investors as well as consumers.