• Create opportunities to systematically build knowledge on technological innovations that are relevant for financial inclusion and mitigate the challenges of de-risking.
• Provide regulatory guidance led by AFI’s Digital Financial Services Working Group and originating from peer learning efforts among AFI members from both within and outside the region.
• Allow for systematic and focused dialogue with private sector, development partners and other international stakeholders to enhance mutual understanding of the risk profiles of FinTech innovations.
• Coordinate support activities and offerings from stakeholders amid resource constraints by policymakers and regulators in PIRI.
• Enable test-and-learn approaches for FinTech for financial inclusion, such as regulatory sandboxes, innovation hubs or RegLabs, which could also support the application of approaches such as tiered KYC, eKYC (including digital identification) and RegTech.
• Undertake capacity building activities for the staff of PIRI central banks, such as practical exposure to FinTech innovations in pioneering countries and training for regulators in collaboration with technical partners on relevant issues such as cybersecurity and anti-money laundering/combating the financing of terrorim (AML/CFT).

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:

• IMPLEMENTING POLICIES TO IMPROVE ACCESS,
• USAGE QUALITY
• UTILIZING TECHNOLOGY FOR FINANCIAL SERVICE
• PROVISION AND ACCESS
• EMPOWERING AND PROTECTING THROUGH
• FINANCIAL LITERACY AND EDUCATION
• COLLABORATING WITH STAKEHOLDERS TO ADVANCE FINANCIAL INCLUSION IN THE REGION
• UTILIZING DATA FOR SMART POLICYMAKING AND MONITORING

• Banco Central Timor Leste
• Bank of Papua New Guinea
• Central Bank of Samoa
• Central Bank of Solomon Islands
• National Reserve Bank of Tonga
• Reserve Bank of Fiji
• Reserve Bank of Vanuatu

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.