Digital financial services, powered by fintech, have the potential to lower costs by maximizing economies of scale, to increase the speed, security and transparency of transactions and to allow for more tailored financial services that serve the poor. This report - Digital Financial Services - describes the tools of digital finance, the successful business models and policies for encouraging their growth. It explores risks and challenges of new types of services and the legal and regulatory frameworks needed for confronting them. Finally, it includes country experiences with promoting the expansion of digital financial services and the obstacles along the way. The current COVID-19 pandemic has amplified the urgency of utilizing fintech to keep financial systems functioning and keep people safe during this time of social distancing, falling demand, reduced input supply, tightening of credit conditions and rising uncertainty. At the same time, these new technologies must be designed and implemented carefully to manage their risks, particularly for the poor and vulnerable, so as not to exacerbate the challenges posed by this crisis.

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