The Covid-19 crisis has revealed the limitations of localized digital ecosystems in an interconnected global economy for Bangladesh and other developing nations. This paper shares Bangladesh’s experience as a global pioneer in digital financial services and proposes policy measures that could further buffer the pandemic’s impacts on local fintech and deepen the digital ecosystem to the future. The experience of Bangladesh can offer insights, practices and lessons learned that could be applicable to other developing countries.
Although Bangladesh has made remarkable progress, implementation of additional policy measures can continue to keep Bangladesh’s momentum in fintech innovation, through maintaining an open and enabling trade policy, building an innovative, technology first approach to public-private partnerships, and increasing digital payments capacity through a market development fund. According to the World Bank’s Global Findex Database, Bangladesh continues to face significant gender imbalances in which men’s access to financial services has grown significantly more than women’s, including for digital financial accounts. Therefore, Bangladesh may consider a market development fund, for example, focused on electronic payments acceptance and digital transformation, which could devise specialized incentives to address the continuing gender disparities in digital payments access and usage, support micro, small, and medium enterprises (MSMEs) and bring forth reach of the benefits of digital transformation to last-mile distribution networks and remote, isolated areas.