We live in a connected world, where globalisation has impacted economies, countries, and lives. Underpinning this connection is the global financial ecosystem, it is now at grave crossroads.
“As the research shows, no matter how you look at it, nobody benefits from fragmentation. Fragmentation has a significant impact on individual countries too, not just in terms of lower economic growth, but it also leads to fewer jobs being created, slows innovation, negatively impacts financial inclusion, and adds risk and uncertainty.Financial fragmentation threatens to undo the progress of globalisation, harming cross-border capital flows and raising the risk of financial instability, Rosemary Stone, Chief Corporate Officer, Swift.
There are no winners with financial fragmentation. At its current rate, the global GDP will decline by US $2.8 trillion dollars by 2030, with global employment reducing by 4.3%. If fragmentation escalates, The Economist’s report, commissioned by Swift, estimates the economy could fall as much as US $6.5 trillion and 9.1% employment.
These costs are not insignificant, and we hope this report helps to raise awareness about the urgent actions public and private sector stakeholders can take to mitigate the impact. The future payments landscape will see multiple models, networks, providers, and technologies continue to proliferate and coexist. By fostering international collaboration, cooperation, and interoperability, we can advance a resilient and interconnected global economy that benefits as many people as possible.”, adds Ms Stone.
In a year of change, with rapid technological advancements, geopolitical tension, and more, the livelihood of the global economy requires not just steps to reverse fragmentation, but safeguards to mitigate future detriment.