FinTech for Financial Inclusion framework sets the stage for digital inclusive finance
“FinTech for financial inclusion has the power to be transformative. It is our task to help bring it forward,” expressed AFI Executive Director, Dr. Alfred Hannig at the 3rd University of Luxembourg Inclusive and Sustainable Finance Research Conference on 13 November, 2018 in Kirchberg, Luxembourg.
The conference is organized by the “Appui au Dévéloppement Autonome” (ADA) and the European Investment Bank (EIB) for research and network partners — who presented on current edge research and policy initiatives — practitioners, policy leaders, and academics with an interest in inclusive and sustainable finance.
“The financial crisis taught us that the developed world does not have all the answers. We see incredible innovations — innovations that are relevant and contextual to their own regions — happening in the developing world. In the aftermath of the crisis, financial inclusion has moved to the mainstream debate on economic and financial development,” conveyed Dr. Hannig.
Prof. Douglas Arner, Kerry Holdings Professor in Law at the University of Hong Kong, presented the FinTech for Financial Inclusion: A Framework for Digital Financial Transformation report, alongside Ali Ghiyazuddin Mohammad from AFI, and Prof. Dirk Zetzsche, ADA Chair in Financial Law at the University of Luxembourg, Faculty of Law, Economics and Finance.
“AFI is a practical organization. The FinTech for Financial Inclusion report will inform a variety of our activities including capacity building, global advocacy and in-country implementation,” explained Dr. Hannig prior to the presentation.
Drawing from the experiences of developing, emerging and developed countries, AFI’s framework on FinTech for Financial Inclusion suggests that the best approach is staged, and progressive — focused on four main pillars: Digital ID and eKYC; Open Electronic Payment Systems; Account Opening & Digitization of Payments; and Design of Digital Financial Market Infrastructure and Systems. The four pillars give a foundation for an evolving digital financial ecosystem and help economies maximize the financial inclusion benefits from FinTech while also balancing financial stability, consumer protection and financial integrity.
The framework provides a guiding force to foster technological innovations that hold a promise to include the unbanked, close the gender gap in financial inclusion, manage climate change risks, mitigate the challenges of de-risking, and bring down the costs of cross-border remittances. The AFI network is developing policy models on various aspects of FinTech for financial inclusion through a member-driven, bottom-up approach.
“We have seen tremendous progress in countries such as China and India. This report can help set up a strategy to expand the use of FinTech as a major driving force for financial inclusion in developing countries,” highlighted Prof. Zetzsche.
View the FinTech for Financial Inclusion: A Framework for Digital Financial Transformation report for more insights.
Sochi Accord: FinTech for Financial Inclusion
“The Sochi Accord on Fintech for Financial Inclusion is a key anchor to encourage the network to leverage the potential of FinTech to advance financial inclusion,” highlighted Ali Ghiyazuddin Mohammad, AFI’s Policy Manager for Digital Financial Services during the Digital Inclusive Finance session.
The Sochi Accord on Fintech for Financial Inclusion, endorsed by the AFI membership at the Annual General Meeting in Sochi, Russia on 5 September 2018 provides a framework for AFI members to leverage innovative new technology-based financial services, or FinTech, to advance financial inclusion for the world’s 1.7 billion unbanked.
“In the coming months, we will come up with guideline notes on KYC innovations, cybersecurity frameworks and RegTech for regulators. We are also working on facilitating dialogue between developed and developing countries to learn about FinTech innovations,” added Ali Ghiyazuddin Mohammad.