E-Finance in Emerging Markets: Is Leapfrogging Possible?

This paper states that most of the benefits of e-finance - such as widening access to financial services, can be realized only if complementary reforms are made in communications infrastructure, security, contract enforcement, corporate governance, and other areas. Specifically, the paper presents:

• Recent trends and prospects in financial services;
• The financial sector development paradigm and needed changes;
• E-finance applications and the implications for government;
• Issues in regulatory and other frameworks.

The paper:

• Argues that the impact of e-finance is not limited to industrial countries and the most advanced emerging markets: for countries with underdeveloped financial systems;
• Hypothesises that e-finance offers an opportunity to "leapfrog" development gaps;
• Examines likely gaps in e-finance and says that e-finance faces large data problems and more effort will be needed to develop a consistent methodology for measuring concepts such as internet penetration;
• Concludes that e-finance will lead to much lower costs and greater competition in financial services.