M-RCBG Associate Working Paper No. 71

Digital Finance: A Survey of Gaps in its Ecosystem

Daniel M. Schydlowsky, Ph.D.



The present survey consists of four mutually related chapters that have the purpose of setting out the task that confronts the desideratum of creating a collectivity of doers committed to achieving a world in which digital finance is widely accepted and applied and in which thereby the members of the bottom of the pyramid are successfully brought into the financial system.

The first chapter refers to Gaps in Topics and Topical Knowledge, and focuses on the many facets that are involved in creating the desired ecosystem where knowledge is still lacking. It covers the full range of gaps, from those found in regulation through gaps extant in interconnectivity, to gaps identified in the area of general acceptance and in value added applications.

The second chapter deals with Gaps in Techniques, where the purpose is to identify techniques that may prove useful in providing guidance on how to move incrementally forward in building a workable digital finance ecosystem and to sketch out what those techniques might look like.

The third chapter focuses on Gaps in Skills of Influence, where the concern is to identify the gaps in availability of the human skills that facilitate interaction between individuals and institutions.

The fourth and final chapter deals with Gaps in Motivators, where the purpose is to identify who motivates the advances in Digital Finance and what gaps there might be in the motivational landscape. In this chapter, particular attention is paid to the role of Standard Setting Bodies (SSBs), the WB, IMF and similar international bodies; the Alliance for Financial Inclusion (AFI), and the Gates Foundation.

By virtue of the emphasis on gaps, this survey does not constitute in any sense a compendium of the existing expertise, nor of the existing literature. The purpose is to explore what is not known rather than what is known. Naturally, it is necessary to have what is known as a starting point, however, what is known to some or at some level, is often not known to others, hence for the purposes of capability creation, distinctions must be drawn between different segments of the knowledge requiring collectivity, in order to finally obtain a proper map of the gaps that exist. Aside from illuminating how high the costs of inaction can be, these case studies establish an understanding of the factors that influence the decision to approve a special operation. They reveal that, in some instances, the options presented to counter emerging threats do not address some decision makers’ key concerns. This paper develops a Direct Action Decision Model to illustrate the relationship between the options presented and the tactical, strategic, and structural factors inherent in the decision environment.

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