More than 30 member institutions of AFI participated in the 5th Annual G24-AFI Policymakers’ Roundtable on Financial Inclusion on 17 April 2013 in Washington D.C., held as part of the Spring Meetings of the World Bank and International Monetary Fund (IMF).

AFI Associate and former Bank of Thailand (BOT) Governor Dr. Tarisa Watanagase presented a paper on the theme of “Standard-Setting Bodies (SSBs) and the Alliance for Financial Inclusion as Platforms for Peer Learning on Financial Inclusion,” which highlighted the potential unintended consequences for financial inclusion efforts of guidance issued by the SSBs and — in preference to further guidance — proposed a peer-to-peer approach to deepen engagement with SSBs.

G24 and AFI members strongly supported Dr. Watanagase’s proposal, notably conveying an intent to converse with SSBs and discuss ways for effective and systematic collaboration.

Participants unanimously expressed their concern that applying the global standards to small providers with low systemic risk or basic banking products targeted toward the poorest consumers may be counterproductive and even hinder financial inclusion if country-specific costs and benefits are not considered. Therefore it is imperative to engage the SSBs in a peer learning exercise and work together to find the necessary balance of regulation that will protect consumers and prevent criminal exploitation of nascent systems, while allowing activities like correspondent banking, microfinance and mobile banking to become reliable mainstream services.

“We need to have a structured approach to effectively engage with the SSBs. A task force or working group could be established to achieve this,” said Zeti Akhtar Aziz, Governor at Bank Negara Malaysia.

To take forward the decision of G24 and AFI members to engage SSBs in dialogue, a panel at the upcoming Developing and Developed Country Perspectives on Financial Inclusion: A Global Dialogue meeting scheduled for 28 June 2013 in Frankfurt, Germany, will be a follow up to this roundtable. SSBs will also be invited to the Global Policy Forum (GPF) in Kuala Lumpur, Malaysia, on 10-12 September 2013 to discuss the most effective approaches for ensuring the complementarity of inclusion integrity, stability, and consumer protection.

“Peer-to-peer engagement is the best way to move forward with the SSBs, and peer-to-peer learning is what AFI is all about,” said Daniel Schydlowsky, Superintendent at SBS Peru. “If we can leverage the AFI experience, we can give the SSBs a powerful tool.”

Participants further stated the need to create a broader risk framework that also incorporates the risks of financial exclusion. The question of how to translate this expanded framework to standardized regulations was subsequently posed, with one potential framework for reference being the Maya Declaration with defined policy areas relevant for financial inclusion, as suggested by Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi.

“We have a clear mandate from this group to move this topic forward together with the standard-setting bodies, and I am confident we will do this in collaboration with the G24 in the coming months and year,” said Alfred Hannig, Executive Director at AFI. “This fascinating and rich discussion today has already shown the potential for peer learning.”