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A well-functioning financial management information system (FMIS) provides timely, reliable, and comprehensive reports that support implementation of the government’s fiscal policies and fiscal rules, and the formulating, controlling, monitoring, and executing of the budget. The architecture of FMISs has undergone a transformation since these systems were first developed in the 1980s. Rather than attempting to cover all or most public financial management (PFM) functions, many FMISs now focus on a few core functions such as accounting and reporting, budget execution, and cash management. Yet a survey of 46 countries shows that many face severe challenges in transforming their FMIS into an effective tool of fiscal governance. These challenges relate to weaknesses in the system’s core functions, its institutional coverage, the information technology platforms it uses, and the ease of sharing data with other IT systems. This How to Note discusses how to address these chal-lenges. Replacing an FMIS with an entirely new system may not be an optimal strategy. By utilizing the latest technology, a better approach may be to update or replace one or more core modules of the system: the so-called modular approach. Implementation of an effective FMIS, however, depends on two critical preconditions: strong political motivation and commitment, and the system’s ability to meet ongoing and anticipated PFM needs.

Economics: General --- Macroeconomics --- Public Finance --- Informal Economy --- Underground Econom --- Foreign Exchange --- Public Administration --- Public Sector Accounting and Audits --- Economics of specific sectors --- Economic & financial crises & disasters --- Public finance & taxation --- Economic sectors --- Financial crises --- PFM information systems --- Public financial management (PFM) --- Informal sector --- Economics --- Currency crises --- Finance, Public

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Fintech payments leverage large digital platforms to fill gaps in the traditional payment system. They have made great strides in increasing access to payment services in several countries around the globe. At the same time, like any innovation, the new payment models are exposed to risks in their operating environment. We review the main fintech payment models (mobile money, internet-based fintech payment, and digital money) and discuss operational and financial risks as well as challenges they face. We then explore how public financial management (PFM), especially treasury payments and non-tax revenue collections, could benefit from fintech payments by providing examples of early fintech applications in different countries and discuss the challenges of integrating them into the public sector. The use of fintech in public finance could bring various benefits—including strengthening fiscal transparency, improving budget planning and execution, and upgrading cash management—if public sector institutional and technological capacities are strengthened and risks are adequately mitigated.

Macroeconomics --- Economics: General --- Industries: Financial Services --- Public Finance --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: Other --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- National Budget --- Budget Systems --- National Government Expenditures and Related Policies: General --- Taxation, Subsidies, and Revenue: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Financial technology (fintech) --- Public finance & taxation --- Distributed ledgers --- Fintech --- Technology --- Mobile banking --- Public financial management (PFM) --- Revenue administration --- Digital currencies --- Currency crises --- Informal sector --- Economics --- Financial services industry --- Technological innovations --- Banks and banking, Mobile --- Finance, Public --- Revenue --- India

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Foundational digital public infrastructure (DPI), consisting of unique digital identification, payments system and data exchange layer has the potential to support the transformation of the economy and support inclusive growth. India’s foundational DPI, called India Stack, has been harnessed to foster innovation and competition, expand markets, close gaps in financial inclusion, boost government revenue collection and improve public expenditure efficiency. India’s journey in developing a world-class DPI highlights powerful lessons for other countries embarking on their own digital transformation, in particular a design approach that focuses on shared building blocks and supporting innovation across the ecosystem.

Macroeconomics --- Economics: General --- Technological Change: Choices and Consequences --- Diffusion Processes --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Public Goods --- Economic & financial crises & disasters --- Economics of specific sectors --- Currency crises --- Informal sector --- Economics