In 2014, 94% of the population in OECD high-income countries is banked, against 54% in the developing countries and less than 5% in some countries Sub-Saharan Africa (source: Global Findex, World Bank). Now, for the least developed countries, the banking and financial inclusion would allow substantial gains in terms of economic efficiency, growth and therefore job creation. In these countries, the banking will not occur in the short term by the proliferation of bank branches, expensive and unsuited to such vast territories. The emergence of mobile telephony accounts is a major technological innovation in the process of accelerating access to banking and financial services. Already in 13 countries in sub-Saharan Africa, over 10% of adults have an account via mobile phone, 58% in Kenya …. Innovation is certainly the finance department, but the finance is at the service of real economy. And this is not debate.
During this time, in Western countries, technological innovation also revolutionizes the financial landscape with transactions in financial markets being carried out in nano seconds but whose analysis benefit / cost is debatable. Moreover, the behavior of the banking and financial institutions in the 2000s confirmed the ineffectiveness of the principle of market discipline and the Great Depression highlighted the excesses of finance. Is the finance, in Western countries, in the service of work and innovation? It is possible to doubt it.
The mirage RoE of 15-20% of the financial industry has dissipated once the crisis has revealed that the latter, without being adjusted for risk, were finally insignificant. The miracle of RoE has resulted more from increased leverage and increased risks not captured by regulators that real productivity gains. However, financial institutions and companies continue to favor in their strategy, short-term financial criteria. In the US, in March 2015, is the Federal Reserve Bank itself refused the plans of distribution of dividends of Deutsche Bank and Santander, and has asked Goldman Sachs, JP Morgan and Morgan Stanley to cut distribution of profits to shareholders. Banks still prefer to distribute their income rather than using them to strengthen their capital and financing innovation, “start-up”, SME and SOHO … consuming activity of equity.
In a context of profound changes in information and communication technologies, business models in the financial industry will have to adapt and cope with competition from new players. Crowdfunding platforms (“crowdfunding”) are an illustration. These platforms both fund donations (amounts raised in France doubling every year), loans, whether or not an interest, and in equity investments. Created in 2006 (by the French Arnaud Laroche) and the NYSE introduced in December 2014, the Lending Club platform has already funding projects for an amount of $ 7.6 billion. It has partnerships with Google and Alibaba and therefore access to billions of “financiers” potential. Funders who are willing to take risks.
The Finance Work employment and innovation is a problem that can not arise in the same terms for the West and developing countries. In the past, it is the technological innovation that will enable the banking and finance to be at the service of growth and therefore employment. In Western countries, finance at the service of labor, that is financing innovation and growth of SMEs
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