Bank of Finland DG discusses IGF, DFS & financial literacy with AFI ED

Bank of Finland Deputy Governor Marja Nykänen and AFI Executive Director Dr. Alfred Hannig held talks on inclusive green finance, digital financial literacy and inclusive financial technology (FinTech) on 12 February in Helsinki.

Led by Deputy Governor Nykänen, the Finish delegation included Kari Kemppainen, Senior Adviser, Payment Systems; Anu Raijas, Senior Adviser and Project Manager, Financial Literacy; and Otso Manninen, Economist, Financial Stability and Statistics.

Finland is among the most digitally advanced countries in the world with the highest number of individuals using internet banking and digital channels in Europe, according to Eurostat.

Despite these achievements, the central bank acknowledged that more work was needed to promote financial literacy and financial services among key target groups, such as the elderly, youth and small businesses.

Bank of Finland, known locally as Suomen Pankki, said that it was helping address this gap by working with key stakeholders to develop a national financial literacy strategy under the guidance of a steering group headed by Deputy Governor Nykänen. The strategy, which falls within the scope of the central bank’s Sustainability Program, aims to improve financial literacy rates among individuals and households and, in turn, boost the digitalization of financial services.

Citing the AFI network’s wide experience and work on financial literacy strategies, Dr. Hannig said that collaboration in this area could be mutually beneficial.

As for green finance, Bank of Finland said that it was working closely with financial service providers and other stakeholders towards creating a carbon neutral economy. The central bank added that there was a need to focus on bringing green finance to small businesses and retail investors as most green financial activity within Finland and European Union was restricted to large entities.

Recognizing the fast pace of change in the structure of real economies, Deputy Governor Nykänen said that central banks should play a greater role in ensuring “a just transition” to ensure that no one is left behind.

She emphasized the importance of cross-border and cross-sectoral collaboration in inclusive green finance and inclusive FinTech, adding that such initiatives should be undertaken gradually with focused and concrete actions applied at each step.

After congratulating the central bank on their cutting-edge work in green finance and inclusive FinTech, Dr. Hannig invited the institution to share its expertise with the AFI network and benefit from the network’s work on these important topics.

“Some of the issues, such as technology, are no longer limited to one country or region,” Dr. Hannig said. “They act as common denominator across geographies, resulting in the need to exchange learnings from global peers through neutral platforms such as AFI.”

AFI and Bank of Finland also discussed potential next steps in their technical cooperation for potential implementation by both institutions. The meeting marks the second set of talks held between the two side in the past 12 months, following discussions held in Helsinki last June.