Pandemic, though terrible, helped push digital financial revolution: Bill Gates

THE Covid-19 pandemic is supercharging the digital revolution and presenting regulators with an opportunity to narrow financial inequities in their countries, said Bill Gates.

"Digital things overall, whether it's remote learning, or telemedicine, or digital finance, were greatly advanced. So even though the pandemic has been terrible, it has pushed for some of these innovations," said Mr Gates, who was speaking at the annual Singapore FinTech Festival x Singapore Week of Innovation & TeCHnology (SFF x SWITCH) via virtual conference on Tuesday.

"In this area (of) digital financial inclusion, it's gotten the governments to say, wow, we really need to fix this."

The billionaire, who, together with his wife Melinda, co-chairs the world's wealthiest charity, said the Bill & Melinda Gates Foundation is working toward enabling two-thirds of the world to gain financial access within the next 10 years.

He cited World Bank data showing the disparity in financial access across the world - as at 2017, 94 per cent of adults in high-income countries had an account either with a bank, financial institution or mobile-money service provider.

This proportion fell to 35 per cent in low-income countries.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Countries like India and Kenya have in recent years put in place technologies to improve digital financial inclusion, said Mr Gates, who was speaking to journalist and news anchor Shereen Bhan at the week-long festival.

His foundation, which has an endowment of over US$40 billion, supports India's nationwide open-source identity platform MOSIP (Modular Open Source Identity Platform), which serves as the backbone for effective delivery of public and private services. During the coronavirus pandemic, this platform enabled authorities to channel financial help digitally to millions who were locked down in their villages.

Central banks and financial institutions are key to facilitating financial inclusion in a digital age, Mr Gates noted.

The foundation's work involves getting central banks comfortable with these new approaches, when they see the success and that the open-source toolkit has worked to track down mistakes and make the systems reliable, he said. And in some ways, they may find these approaches better than cash, as central banks "can go back and audit what's going on", Mr Gates added.

"We think over the next five years most of the central banks will see it's okay to do this, because the building blocks are very accessible and there is almost a straightforward way that they can get their citizens all connected up."

Mr Gates also said it is "absolutely critical" to narrow the persisting gender gap in financial inclusion. He noted that studies have shown how money that comes under the control of women in a household will more likely be used for pro-family expenditures such as nutrition and education.

Commenting on the Covid-19 vaccine furore, Mr Gates expects about six vaccines to be approved by the first quarter of next year, with the addition of vaccines made by AstraZeneca, Johnson & Johnson, and NovaVax, to those from Pfizer and Moderna that have shown effective results against the novel coronavirus.

Even as they are approved, equitable distribution of the vaccines will be key, he said. "We need to make sure we do this in a somewhat equitable way", whereby access to the vaccine is not determined by individuals' levels of wealth.

The cooperation demonstrated in generating these vaccines is worth celebrating, but national governments cannot let their guard down again, in the case of another pandemic, Mr Gates said.

"Governments are there to think ahead to bad things that might happen. In the case of (the Covid-19) pandemic, not enough was done. We can't forget that another pandemic will come and we'll need to invest in being ready in that," he said.

"So there is a bright side and we just have to take full advantage of that, while not forgetting that we were not prepared and we're going to have to invest - just like having a fire department - some money in an intelligent way and actually simulate what might happen and make sure that we're ready for it."