Why FinTech is an Important Ingredient in Any Smart City AmbitionJuly 10 2019
Smart cities. They were a popular term that has since lost a bit of its steam among the general public, and yet, with the dramatic reduction of Internet-of-Things (IoT) prices last decade, the smart city initiative is now a gleam in many government’s eyes.
According to the International Data Corporation, global smart city spending is set to accelerate from US$81 billion in 2018 to US$158 billion by 2022.
A smart city here refers to a city that utilises IT and Internet-of-Things (IoT) technology to enhance the quality and performance of urban cities, in areas like energy, transportation, utilities, to reduce wastage, resource consumption, and overall costs. Some strategic priorities in smart city building are: sustainable planning and administration, intelligent transportation, and data-driven public safety.
The goal here is to enhance the overall quality of life for its citizens, and smart cities posit that technological advances are the way to do this.
The often discussed smart city movements lean towards traffic systems, solar power plants, water supply networks, waste management, crime detection and etc, but one cannot undermine the role FinTech needs to take to truly achieve smart city status.
How FintTech Ties into Smart Cities
Some of the best FinTech solutions were designed to streamline extremely complicated procedures that have developed over the many, many years of banking. Ripple, now a famous cryptocurrency, was one of such solutions—designed to cut through much of the existing bureaucracy of remittance by connecting banks directly to one another.
It is also worth noting that crypto-backed remittances have also grown more popular among governments. Just in May, Singapore and Canada just successfully trialed cross-border payments with central bank-backed digital assets.
The intended result are remittances that can be done cheaper, for much faster, and some would argue with more transparency than before.
It is obvious that a city that manages to enable speedy and cheap overseas transfers will also enable its citizens greater access to the global market. Much of today’s moneymaking opportunities are online, after all. Ona lesser note, cheaper and quicker payments will allow for less stressed citizens too. And this is only one aspect of FinTech, a term which encompasses payments, micro-financing, regtech, insurtech, and many others.
To the point of sustainable administration being a smart city priority, a government that enables its populace to simply go online to pay taxes and otherwise interact financially adds a crucial level of convenience—after all, citizens wanting to perform their civic duties shouldn’t be given a hard time in the process. And in the long-term, online payment gateways reduces the need for physical counters, which will overall save money.
But if we look towards the future a little bit more, proper analytics conducted on this data could even help a government track the spending abilities of its populations, discover some financially vulnerable segments and grant assistance before they fall into a deep financial pit, more effectively identify growing economic segments, and generally have more basis for any economic planning for its population.
Cultivating FinTech in a smart city is a no-brainer. Helping local finance and tech geniuses cultivate their locally-curated solutions can help embolden locals to stand strong with their homegrown services. Overall, a FinTech game plan encourages more international business in a city, conveniences its population (though after a tough period of education), and most importantly, garnishes a government with a selection of FinTech solutions that they can choose to adopt into their core operations—or even embolden the population with talent that can help do so.