PIRI was created at the 2014 Global Policy Forum (GPF) in Trinidad and Tobago and officially launched the following year in Dili, Timor-Leste, with the vision of making financial services accessible to all Pacific Islanders. The region faces access challenges due to factors including geographically dispersed islands, small populations and limited banking infrastructure.
The initiative invites member institutions to share in a common vision while working toward ensuring that financial services are widely accessed throughout the region. With PIRI, AFI has created a unique model of south-south engagement and peer learning that aims to provide all low-income Pacific Islanders with access to formal and informal financial services.
PIRI has five objectives: remove policy barriers to improve access; use technology for financial service provision and access; empower and protect through financial literacy and education; collaborate with stakeholders to advance financial inclusion in the region; and use data for smart policymaking and monitoring.
Bank of Papua New Guinea
Central Bank of Samoa
The PIRI member countries have comparable characteristics and challenges. The challenges faced by most of these countries are very similar in nature due to their location, cultural and behavioural patterns, lack of resources, a narrow export base, vulnerability to economic shocks and slow or negative economic growth. Their geographical spread from east to west covers over 7000 kilometres of ocean. The ocean simultaneously demarcates their borders while also being the bond that unites their economic and developmental initiatives. Moreover, due to the geographical dispersion of the islands, access to these areas makes it exorbitant for both suppliers and receivers of financial services.
The objectives of PIRI are to ensure that within the Pacific Islands region, their work shall be to assist/support:
The Pacific Regional Regulatory Sandbox is a multi-tenant “test and learn” resource delivered via a formal framework and platform, governed, and operated by eight central banks, to allow FinTechs and interested innovators experiment novel financial services & technologies, business models and other financial innovations in a controlled live environment subject to specific safeguards and oversight.
The sandbox is intended to foster, accelerate, and sustain an appropriate and balanced inclusive digital economy that supports the modernization and integrity of payment and financial systems, encourage innovation and competition, promote financial stability and security, and catalyse financial inclusion for all segments including youth, women, older people, rural communities, forcibly displaced, MSMEs and other vulnerable and disproportionally excluded due climate change events.
The financial services innovations, without prejudice to technology, expected to be tested in the regional sandbox must show great promise and progressive potential to benefit and deliver value across industries such as agriculture, tourism, fisheries, MSME, cross border commerce and trade etc., via relevant several use cases including but not limited to, digital payments, digital credit, remittances, micro-insurance, innovative savings, investments and pensions products and services, payment aggregation, transaction processing and settlement, e-commerce, bill collections, green finance initiatives and much more.
The sandbox is coordinated, operated, and availed through an integrated portal found here: www.pirisandbox.org; where expressions of interests, enquiries and applications are accepted without placing undue complexity, time, or effort on applicants with drawn-out duplicate processes probable with engaging with multiple jurisdictions.
More information on how innovators using technology for good can participate and do business in one of the thriving and beautiful regions of the world can be found in the Pacific Regional Regulatory Sandbox Guidelines.
According to the Financial Stability Board (FSB) Correspondent Banking Data Report the Melanesia and Polynesia sub-regions saw declines of 47.8% and 43.6% respectively in correspondent banking relationships (CBRs) in the period of 2011-2019, the top two highest sub-regions globally. Apart from Samoa, all PIRI member countries fall into the top 50 countries globally which experienced the largest cumulative declines in the number of CBRs between 2011 and 2019, with Timor-Leste falling into the top ten with a decline of 73.6% in CBRs over the period.
Given the above context, the PIRI Leaders and EGFIP Members endorsed the development of a Regional De-risking Action Plan for the Pacific at the 10th PIRI Meeting in Honiara, Solomon Islands in June 2019. The purpose of the Action Plan is to harmonize PIRI Members’ efforts at the regional level and to then drive the formulation and implementation of National Action Plans to reverse or stem de-risking within their own jurisdictions.
Following that, PIRI conducted a two-day workshop in Sydney, Australia in November 2019 to further develop and finalize the action plan with key non-PIRI jurisdictions and regional partners. The workshop emphasized an open and inclusive consultative approach that ensured shared ownership among the stakeholders and attained a consensus on feasible timelines, roles and progress tracking mechanisms.
The objective of the de-risking action plan is to increase economic stability through stable global and regional banking relationships and financial services that are accessible to all Pacific islanders.