How Can AI Bridge the Digital Divide for Digital Financial Inclusion in Developing Economies?

Categories : Blog


Author: Sephutile Mhlongo

The digital divide is the gap between those who have access to and can use information and communication technologies (ICTs), and those who do not. This gap affects millions of people in the developing world, especially in rural and remote areas, where ICT infrastructure is often lacking or inadequate. The digital divide also has implications for access to financial services, such as banking, insurance, and remittances, which are essential for economic development and poverty reduction.

One of the main contributors to the digital divide is the lack of digital literacy, which is the ability to use ICTs effectively and responsibly. Digital literacy includes skills such as searching, evaluating, creating, and sharing information online, as well as understanding the ethical and social implications of digital technologies. Without digital literacy, individuals face formidable barriers to accessing and benefiting from ICTs, which extends to missing out on the essential financial services critical for economic development and poverty reduction.

AI: A Powerful Bridge Builder

Artificial Intelligence (AI), which is the science and technology behind machines and systems that perform tasks requiring human intelligence, is already revolutionising various sectors, including education, healthcare, agriculture, and finance. AI offers solutions to some of the key challenges posed by the digital divide, and it can bolster digital literacy in the developing world.

Here is how AI can contribute:

  • Personalised Learning: AI can offer tailored, adaptive learning opportunities, motivating individuals to enhance their digital skills. Through interactive and engaging content, it can foster a deep-seated interest in learning.
  • Access to Reliable Information: AI can filter out fake news, misinformation, and harmful content, ensuring that individuals have access to accurate and relevant information.
  • Inclusive Communication: By offering translation, transcription, and speech recognition services, AI makes communication more accessible, transcending language barriers.
  • Empowering Content Creation: AI provides the tools for users to create and share their content online, enhancing digital literacy through content generation and editing.

Digital Financial Services and AI

AI can also address the digital divide in financial services:

  • Efficient and Secure Transactions: AI enhances security and efficiency through biometric authentication, blockchain technology, and smart contracts.
  • Affordable and Convenient Services: Mobile platforms, chatbots, and robo-advisors powered by AI make financial services more affordable and accessible.
  • Personalised Services: AI uses data analytics, machine learning, and behavioural insights to tailor financial services to individual needs.
  • Financial Inclusion and Literacy: AI provides education and guidance to support financial inclusion, ensuring that individuals have the knowledge they need to make informed financial decisions.

Challenges and Risks

AI is not a magic bullet that can solve all the problems of the digital divide. AI also poses some risks and challenges that need to be addressed carefully. Privacy, security, accountability, transparency, bias, discrimination, and human rights are pressing issues that require careful consideration. Adequate infrastructure, regulation, governance, and ethical safeguards are essential to ensure responsible and beneficial AI use.

Regulation of AI

Regulation of AI is a complex, on-going process with different jurisdictions employing different approaches and policies to regulate AI. Here are some examples:

  • The UK government has set out plans to regulate AI with new guidelines on “responsible use”(McCallum, 2023). Instead of creating a single regulator for AI, the government wants existing regulators to come up with their own approaches that suit the way AI is being used in their sectors.
  • In the EU, the European Commission has proposed a legal framework for AI that aims to ensure trustworthiness and excellence in AI. The framework includes a risk-based approach that classifies AI systems into four levels: unacceptable risk, high risk, limited risk, and minimal risk. The framework also sets out mandatory requirements for high-risk AI systems, such as human oversight, data quality, technical robustness, accuracy, transparency, and traceability(EU Parliament, 2023).
  • In Africa, the African Union (AU) has adopted several instruments and initiatives to guide and support the development and governance of AI in Africa(Ryder, 2023). For example, the AU Convention on Cyber Security and Personal Data Protection, also known as the Malabo Convention, is an important tool to regulate aspects of AI such as automated processing of personal data.
  • Some African countries have developed or are developing their own AI strategies and policies to guide the development and use of AI in their contexts. For example, Mauritius was the first country in Africa to publish a national AI strategy in 2018, which outlines its vision and goals for becoming an AI hub in the region(ALT Advisory, 2022). Egypt launched its national AI strategy in 2021, which aims to transform its economy and society through AI applications in various sectors (Olorunrade & Omoniyi, 2023). Kenya has an AI task force that is creating guidance on how AI technologies can be used to further the country’s development (Olorunrade & Omoniyi, 2023).

Fostering Digital Literacy

To unleash the full potential of AI in bridging the digital divide, fostering digital literacy is pivotal. This requires a collaborative approach involving governments, civil society organisations, private sector actors, educators, researchers, and users. It’s an ongoing process of learning, adaptation, and innovation to respond to the evolving needs and opportunities of the digital world.

AI is a potent tool to bridge the digital divide, transforming lives and communities in the developing world. By enhancing digital literacy and facilitating access to digital financial services, AI paves the way for social and economic development. It opens new avenues for cross-border collaboration and co-creation, forging a more connected and inclusive world. As we move forward, let us harness AI to create a more equitable digital future for all.


Sephutile Mhlongo

Macroeconomic Strategist & Executive Aide to the CEO at FNB Eswatini

DFI Alumni, Community Member and Former Manager of Financial Regulation and Supervision at Digital Frontiers



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EU Parliament, 2023. EU AI Act: first regulation on artificial intelligence. [Online] Available at:
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McCallum, S., 2023. UK rules out new AI regulator. [Online] Available at:
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Olorunrade, G. & Omoniyi, F., 2023. Where is Africa in the global conversation on regulating AI?. [Online] Available at:
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Ryder, H., 2023. AI regulation: Why Africa must have a voice in global talks. [Online] Available at:
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