Joe Biden has nominated Ajay Banga, the longtime former CEO of Mastercard, to lead the World Bank. Banga’s appointment as president of the World Bank is pending the approval of the World Bank's executive board, but due to the structure of the World Bank and IMF, it's expected to be a formality.
So with Banga now just the World Bank president waiting, it’s time to ask, ‘'what will the World Bank according to Mr Banga mean for fintech?’
Finance is Climate, Climate is Finance
Banga’s nomination comes after the controversial presidency of David Malpass, who was nominated for the top role by Trump. Malpass faced criticism from the Biden administration and others for his denial of the link between human consumption of fossil fuels and climate change. This controversy ultimately led to his resignation a year earlier than scheduled.
In contrast to Malpass, Banga is likely to prioritize sustainability and support for less wealthy countries transitioning to a green agenda. His efforts at Mastercard demonstrate his commitment to sustainability. For instance, in 2020, Mastercard launched the Priceless Planet Coalition, which pledged to plant 100 million trees, with Banga claiming it was possible to unite corporate sustainability efforts and make meaningful investments to preserve the environment.
This advocacy for addressing climate change is certainly going to be a key focus for him at the bank. Where Malpass was unwilling to accept human responsibility for climate change, Banga wrote a call-to-arms on Mastercard’s website stating, “I don’t think you need me to tell you why action on climate change is required.”
In the days before Banga’s nomination, US Treasury Secretary Janet Yellen said the Biden administration will put forward a “commitment to the kind of reform process that we want to see the bank engaged in,” she said. Central to those reforms is a more concerted effort on addressing climate change, with Yellen suggesting a slew of approaches including finding ways to better mobilize private capital to invest in the developing world. In Mr Banga, it certainly seems like those ambitious reforms have found a natural ally.
If climate is likely to be front and center of Mr Banga’s agenda, his time at Mastercard suggests a World Bank under him is likely to marry sustainability efforts with fintech. The India-born Banga boasts an impressive track record at the helm of Mastercard, overseeing a huge increase in Mastercard’s valuation, from under $30 billion to more than $300 billion by the end of his tenure.
Banga, who refers to himself as a ‘Made in India guy’, led the company through this period of tremendous growth despite the continued disruptive threat of fintechs, not least with a focus on driving innovation at the payments behemoth. During his time at Mastercard, Banga was also an advocate for financial inclusion and oversaw the development of digital payments platforms that made it easier for people around the world to access financial services.
The World Bank under Ajay Banga
If past evidence is worth going by all signs point to a Banga presidency at the World Bank as a serious force for positive change in the face of the urgent climate challenges we face. As a vastly experienced corporate leader with a strong track record and a commitment to sustainability, he is well-positioned to lead the World Bank towards a more sustainable and inclusive future.
There are some things money can’t buy. That certainly is true. Let’s hope when it comes to climate change, there’s a Mastercard CEO.