Financial innovation boosts humanitarian aid: Swiss foreign minister

Ignazio Cassis believes innovative finance is an effective path towards humanitarian aid. Keystone/ Valentin Flauraud

Swiss Foreign Minister Ignazio Cassis believes that blockchain, coupled with the latest innovations in financial technology, can boost humanitarian relief efforts in crisis-stricken regions.

Speaking at the Crypto Finance ConferenceExternal link in St Moritz on Friday, Cassis said connecting people to financial services is just as important as providing sanitation, clean water and shelter.

“Today, millions of people in need receive humanitarian assistance through financial service providers, via ATM cards, mobile money, electronic vouchers or through blockchain solutions,” Cassis told the audience of blockchain specialists and investors.

“Around 16% of total global humanitarian aid today is channelled through cash and voucher assistance. It is often more efficient than traditional humanitarian aid.”

Swiss Humanitarian AidExternal link pioneered the use of cash transfers in crisis zones in the 1990s, Cassis added. Switzerland has implemented 30 such payment projects in such countries as Syria and in Albania, which was devastated by an earthquake last November. Victims were able to withdraw cash within eight days of the disaster.

“It also puts affected people in the driving seat, allowing them to choose for themselves how, where and when to cover their basic needs,” Cassis said.

He believes that the financial dimension of humanitarian aid is set to play a more important role in future with the advent of alternative mobile payment solutions. Some 90% of adults in sub-Saharan Africa have access to mobile phone connections, connecting them to financial services even if there are few or no local banking branches.

Closer to home, Cassis was challenged by Crypto Finance Conference delegates to explain why blockchain start-ups struggle to get basic banking services in Switzerland. Speaking to swissinfo.ch after his speech, Cassis said the industry should trust in the ability of the very technology they are creating to find a solution to the problem.

“Blockchain has the potential to improve the financial system by providing access to banking services beyond the traditional banking sector,” he said. “The banking system also needs to reinvent itself to meet the challenge of this disruptive technology.”