AFI, BNM conduct regulatory impact assessment member training

AFI, in collaboration with Bank Negara Malaysia (BNM), launched three-day member training on regulatory impact assessments (RIA) this week in Kuala Lumpur.

There has been an increasing commitment by AFI and its members on setting clear targets and indicators of financial inclusion, on measuring financial inclusion and on promoting evidence-based policy making. Based on these trends, there was a felt need for a structured approach to informed policy making and for assessing the impact of regulations.

The RIA training has been designed in response to this and offered to AFI members for the first time, bringing together 38 participants from 23 countries and 25 institutions. Bankable Frontier Associates (BFA) has sent technical experts for the training.

Mr. Thomas Tan Koon Peng, Human Capital Development Centre, BNM, emphasized the importance and the success of the structured capacity building events and of the peer learning model on which these are based. They expressed their satisfaction in being able to contribute to the capacity building of members across the AFI network.

Mr. Norbert Mumba, Deputy Executive Director at AFI, in his opening remarks highlighted the importance AFI attaches to RIA; both to ensure that effective policies and regulations are developed, and  to assess the impact of the regulations on the society. He said, “no risk is risk—there is risk everywhere and we need to ensure that we mitigate risk without hindering the delivery of products and services to the very consumers that we seek to protect.”

Furthermore, in regard to the designing and delivery of this training, he said, “it is timely in that it affords an opportunity to the importance of monitoring why we are doing what we are doing, what is the impact of the initiatives undertaken, (and) how can we help ensure that the initiatives lead to the desired change.”

This training introduced the participants to a framework on a systematic approach of regulatory reform:

• to identify the need for regulatory reforms
• the objective of the new regulations
• how to use existing data to draft new regulations
• how to monitor the change these regulations cause, to assess the impact of these changes in regulation on financial inclusion.

The training focused on the need to institutionalize this process rather than practicing it as a one-off initiative. The training discusses both an ex-ante and post-ante approach which creates an opportunity to re-align initial plans.

Participants shared that though policymaking was their core business, there have been very few initiatives to measure the impact of the work they do. Thus they felt that this was very critical to assess their progress. They worked on individual “problem tree” to understand how to derive the root causes for their problem statements.

The training equipped the participants with knowledge and skills to help strengthen the work of AFI and its members and to enhance the focus on measuring the scale and impact of financial inclusion.