Sustainable financial inclusion to ensure elderly do not fall out of system, AFI ED tells GPFI panel in Tokyo
Sustainable, long term financial inclusion is broader than access alone, AFI Executive Director Dr. Alfred Hannig said during the Forum on Aging and Financial Inclusion held by the Global Partnership for Financial Inclusion (GPFI), in Tokyo on 7 June. The high-level symposium is focusing on challenges and solutions to drive financial inclusion for older adults.
Dr. Hannig moderated discussion on “Call to Action for the Upcoming Super-Aging World- How can the financial services industry help ensure financial inclusion”. Panellists included Toshihide Endo, Commissioner of the Japan Financial Services Agency; Roberto de Oliveira Campos Neto, Governor of the Central Bank of Brazil; Felix Hufeld, President of German Federal Financial Supervisory Authority (BaFin); and Maria Jahrmann Bjerke, State Secretary at the Ministry of Health and Care Services of Norway.
“We don’t want a situation where people fall out of the system over time. So, our conception of financial inclusion is broader than access alone”, he said adding that the main objective is not just to bring people into the financial system, but sustainably over time.
The discussion focused on financial needs of aging populations and policies that can help people better prepare for old age. The aim of the G20 Fukuoka Policy Priorities is to help policymakers, financial service providers, consumers and other actors in the real economy to identify and address the challenges associated with aging populations and the global increase in longevity.
With 70% of older people now in G20 countries and majority of younger people are in the emerging and developing countries, the “concept should be no-one left behind, we want to include all age groups”, Dr. Hannig highlighted.
Japan Financial Services Agency has made efforts on ageing in line with the Fukuoka Policy Priorities, Commissioner Endo said as he emphasised the use of financial data in reaching the elderly. He explained how non-financial data has been used that shows increasing number of Japanese are continuing to work beyond traditional retirement age, adding that the first Fukuoka Policy Priority is use of data and evidence. “Going forward – these priorities are extremely important and Japan will share lessons with the rest of the world”, the Commissioner said.
Aging is a global phenomenon and people are living longer lives, Norway’s State Secretary Bjerke told the panel. With access to financial services being vital in today’s technological societies, elderly sometimes still prefer cash, she said adding that by providing assisted tools, the silver economy can stimulate innovation. “We must see elderly as a resource, explained as many continue to live in good health 20 – 30 years into their retirement, she said underscoring that “the potential for their contribution to society is tremendous”.
Secretary Bjerke cautioned that one important challenge concerns women, as many have lived with their partners who have handled financial affairs, which means that equality should be ensured at an early age.
Financial inclusion is number one priority on the agenda of Brazil’s Central Bank, Governor Campos said. One of the eight objectives of the Fukuoka priorities is to strengthen digital and financial literacy and provide everyone with practical skills and knowledge to managing finances in changing financial landscape. Governor Campos explained that by combining technology with creativity, better financial education can bring down default rates, which is “good for the people and good for financial institutions”, adding that Brazil “must democratize financial markets”.
“Digitalization doesn’t need to be enemy of elder people, it can be a very good friend”, BaFin President Hufeld emphasised while explaining that market access is key. People are disenfranchised if companies are not accepting cash and the regulator needs to step in, he said. At the same time, product design, as well as how products are sold, should be adapted to elderly people, while financial planning and taking care of financial safety must start earlier than the age of 65, BaFin President said.
As Fukuoka principles go across the various age groups, what is relevant for the elderly is relevant for all, Dr Alfred Hannig said at the end of discussion, adding that the young of today are the elderly of tomorrow. “This is a global phenomenon, not only an issue in G20 and the Fukuoka Policy Priorities will help all countries tackle this challenge”, AFI Executive Director concluded.
The G20 Fukuoka Policy Priorities on Aging and Financial Inclusion include: use of data; strengthening digital and financial literacy; supporting lifetime financial planning; customizing/addressing the diverse needs of older people; innovating – harnessing inclusive technologies; protecting/tackling financial abuse and fraud of older people; Encouraging stakeholder engagement – a multisector approach; targeting key audiences – addressing vulnerabilities.
The GPFI forum is exploring multiple dimensions of aging as part of developing comprehensive approaches to the financial inclusion challenges faced by older adults. Policy makers are deliberating the future of financial services and how policy interventions and digital innovations can help advance the financial well-being of the elderly.
The Global Partnership for Financial Inclusion (GPFI) is an inclusive platform for all G20 countries, interested non-G20 countries and relevant stakeholders to carry forward work on financial inclusion, including implementation of the G20 Financial Inclusion Action Plan, endorsed at the G20 Summit in Seoul. Under the Japanese Presidency, the GPFI has been discussing the challenges to financial services and possible responses in face of aging.