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The Fintech revolution: The end of banks as we know them?

Sergio Schmukler's picture

The retrenchment and intensified regulation of the traditional banking system after the global financial crisis, combined with greater access to information technology and wider use of mobile devices, have allowed a new generation of firms to flourish and deliver a wide array of financial services. What does this mean for the traditional banking system?

In the Global Financial Development Report 2017/18 and a new Research and Policy Brief, we argue that despite the rapid expansion of fintech companies, so far, the level of disruption seems to have been low. This is partly driven by the complementarity between the services provided by many fintech providers and traditional banks. That is, in many instances, the new fintech companies bring alternative sources of external finance to consumers and SMEs, without displacing banks. For example, online lending is an alternative for the type of borrower usually underserved by traditional banks. This is of special relevance not only for households and firms in the developing world (where the banking system is often underdeveloped), but also for underserved borrowers in high-income countries. Moreover, because a bank account is needed to perform many of the fintech services, it is hard now to imagine fintech companies overtaking banks completely and becoming involved in the current accounts niche. There will always be need for a highly regulated service that allows households and firms to keep their money safe and accessible. Banks seem to be the players best suited for that role.

Survey specialists and data scientists meet: machine learning to measure a person’s height from a picture.

Michael M. Lokshin's picture
A test subject holding a reference image and a silhouette derived from the photo by Tensorflow/DeepLab semantic image segmentation model.

Human body measurements are used to evaluate health trends in various populations. We wanted a simple way to reliably measure someone’s height as part a field interview, using a photo of them holding a reference object. We’ve developed an approach and would highlight two things we learned during the process:

  • With an iteratively refined method, it’s possible to get a measure of someone’s height accurate to 1% from a well-composed image of them holding a calibrated paper printout. We plan to integrate this functionality in to the free World Bank Survey Solutions CAPI tool.

  • We found working with an in-house team of survey specialists and data scientists the best way to tackle this problem. It’s only when we combined our domain knowledge and field experience with our data science skills and a healthy dose of creative problem solving, were we able to develop a working prototype.

The School Leadership Crisis Part 1: Making Principals Work for Schools

Ezequiel Molina's picture
Worldwide, hundreds of millions of children reach young adulthood without acquiring even the most basic skills – a phenomenon dubbed "the global learning crisis." Concurrently, few of the principals who oversee these schools exercise strong management practices, which include setting learning targets, using data to guide instruction, observing classrooms, and providing feedback to teachers.

Having an impact as a development economist outside of a research university: interview with Evan Borkum of Mathematica

David McKenzie's picture
Today’s installment in this occasional series on how to use your development economics PhD outside of a research university is with Evan Borkum, a senior researcher in the International Research Division of Mathematica Policy Research Inc.


DI: Please provide a short paragraph describing what you do in this job, and give us a sense of what a typical day or week might look like for you. My job is to conduct independent rigorous impact and performance evaluations of social programs in developing countries. Most of this work is conducted under contract to US government agencies (mostly MCC and USAID) and various foundations, who issue requests for proposals to evaluate their programs. In my eight years at Mathematica I’ve worked on evaluations in Asia, Africa, and Eastern Europe, and in topic areas including agriculture, primary education, vocational training, maternal and child health, land, and others. As senior researcher on an evaluation team I’m typically responsible for technical leadership of all aspects of an evaluation, including study design, data collection, and final analysis and reporting. Last week was fairly typical and included work on designing a randomized controlled trial of an anti-child labor program, drafting a quantitative survey of vocational education students, and planning the analysis of survey data from farmers in Morocco.

Madagascar, a Country of a Thousand Hopes, a Country of a Thousand Vulnerabilities

Claudia Navalonirina Raobelina's picture



In 2018, Madagascar is said to be one of the poorest countries in the world. Antananarivo is said to be the third dirtiest capital. Some diseases like the plague persist in the country, even in 2017. Moreover, more than 35% of adult Malagasy people are still illiterate. One can witness corruption on every level. Every morning, a new political scandal can be read through newspapers’ headlines.

My most heartfelt congratulations to Claudia Navalonirina Raobelina, winner of the first #Blog4Dev competition organized in Madagascar!

Coralie Gevers's picture


Photo: Mohamad Al-Arief/ The World Bank

For this first staging of the competition in Madagascar, young people were asked to share their vision for Madagascar, which is poor but endowed with abundant resources and potential, “Madagascar – land of a thousand smiles and a thousand sorrows.” Over 230 young people aged 18-28 submitted an entry to the competition. Thank you for your enthusiastic response!

Three Opportunities and Three Risks of the Belt and Road Initiative

Michele Ruta's picture

The Belt and Road Initiative (BRI), first proposed by Chinese President Xi Jinping in 2013, is an ambitious effort to deepen regional cooperation and improve connectivity on a trans-continental scale. While the scope of the initiative is still taking shape, the BRI consists primarily of the Silk Road Economic Belt, linking China to Central and South Asia and onwards to Europe, and the New Maritime Silk Road, linking China to the nations of South East Asia, the Gulf Countries, North Africa, and on to Europe. Six other economic corridors have been identified to link other countries to the Belt and the Road.

Weekly links May 4: has your study been abducted? Noisy risk preferences, why we should be cautious extrapolating climate change and growth estimates, and more...

David McKenzie's picture
  • Excellent tradetalks podcast with Dave Donaldson has a detailed discussion with him on his work looking at the impact of railroads on development in India and in U.S. economic history.
  • The latest Journal of Economic Perspectives includes:
    •  Acemoglu provides a summary of Donaldson’s work that led to him receiving the Bates Clark medal
    • Several papers on risk preferences, including discussion of whether risk preferences are stable and how to think about them if they are not (interesting sidenote in this is a comment on how much measurement error there is when using incentivized lotteries – the correlations between risk premia measured for the same individual using different experimental choices can be quite low, and correlations tend to be higher for survey measures – and speculation that the measurement error may be worse in developing countries “large share of the papers that document contradictory effects of violent conflict or natural disasters use experimental data from developing countries, but these tools were typically developed in the context of high-income countries. They may be more likely to produce noisy results in samples that are less educated, partly illiterate, or less used to abstract thinking)
    • a series of papers on how much the U.S. gains from trade

Using social media, youth can help end GBV in Rwanda

Prince Arsene Muhoza's picture



It all began with young girls, later, to be women grew up with no, or little rights, no voice and no choice, even to choose who to marry. On the other hand, men and boys were considered born with divine supremacy over women. Only men could think and act right, and they enjoyed total influence over the women in their households and sometimes outside them. A man’s power over women was absolute, omnipresent and unquestionable and our patriarchal society trained women to accept and live with it. Otherwise it was a taboo.


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