The Role of Fintech and the Fourth Industrial Revolution Technologies in the Advancement of Digital Financial Inclusion in Developing Economies

Abstract

Fintech has accelerated the supply and access to usage of digital financial services (DFSs) globally. This expansion of the digital economy and the Fourth Industrial Revolution (4IR) coupled with the Covid-19 pandemic. Developing economies have also experienced a surge in the development and uptake of fintech and the application of 4IR technologies in the financial services sector. 4IR technologies that include Big Data, Cloud Computing, Artificial Intelligence, the Internet of Things, Data Analytics, Blockchain, and Robotic Process Automation have been employed to enhance financial services provision and to widen digital financial inclusion. Taking into cognisance the double-edged sword or two-fold effect of technology (both the transformative and disruptive effect), through a systematic review, this study sought to assess how the development of fintech and the deployment of 4IR technologies contribute to the advancement of digital financial inclusion in developing countries. The findings of the chapter were conflicting. Even though the positive externalities such as digital financial inclusion, financial inclusion, heightened access to affordable sources of finance, improved financial and non-financial performance for financial services providers, and the attainment of several sustainable development goals (SDGs) are promising, the unfavorable consequences of applying fintech and 4IR tools were similarly concerning. The negative effects encompass the increase of biases, heightened risks and fraud levels, increased inequalities, the gender disparity in the use of financial services due to the lack of digital infrastructure, digital divide and digital financial illiteracy.