High-level representatives from 18 countries met in Windsor, UK from 8-9 March at the Global Leadership seminar to discuss the best way to regulate innovative modes of financial service delivery to reach the poor. 

AFI drew a number of key insights and lessons learned from the seminar. These include: 

1.      There is strong leadership and commitment to financial inclusion 

The participation in the seminar of an important number of Governors, Deputy Governors and senior policymakers from financial regulatory authorities including from India, Kenya, Pakistan, Philippines, Mexico, Ghana, Tanzania, Nigeria, Peru and Brazil shows a clear demonstration of the strong leadership and commitment by policymakers from developing countries to promoting financial inclusion.

2.      Debates suggest focus on ‘banking beyond branches’ 

Against the background of increasing awareness and adoption of technology enabled delivery channels – often referred to as ‘branchless banking’, seminar participants underlined that bank branches are still essential, and that the debate should therefore focus more on banking beyond branches in order to broaden the scope of new delivery channels and range of financial products for poor people. And while considerable progress has been made in generating knowledge on the new delivery channels of ‘branchless banking’, seminar discussions indicated the urgent need to expand the debate to include appropriate products.

3.      Understanding the risk profile of emerging business models is crucial 

In moving the debate beyond payments and remittances, discussions underlined that further work is required to enable better understanding of the risk profiles of various emerging business models being implemented through technology-enabled delivery channels. This in turn will support greater adoption and success of innovative delivery channels in contributing to financial inclusion. Expanding the range of financial products for the poor could also involve partnerships between financial institutions (including banks, deposit-taking MFIs, cooperatives etc) and non-bank operators such as mobile phone network operators and agents, leveraging on the mobile platform as an efficient and cost-effective delivery channel. Policymaker participants underlined their key considerations of safety and cost effectiveness, and that these are crucial features for the adoption of new technology-enabled products.

4.      Financial integrity and inclusion are complimentary 

The event was also attended and addressed by the President of FATF, who underscored that financial integrity and financial inclusion are complimentary goals, and that the AML-CFT framework provides both the opportunity to identify and better understand the risk profiles of new products as well as the flexibility for countries to individually design AML-CFT frameworks that bring people into the financial system without undermining its integrity.

5.      Peer-learning and knowledge exchange is critical for sustained action

Policymaker participants at all levels underlined the importance of peer learning and exchange approach as an important mechanism to sustain active consultations on approaches to regulating new delivery channels. 

The Windsor event is the third annual seminar for high-level policymakers and regulators hosted by AFI, CGAP and DFID. The important insights drawn from the seminar are critical to moving forward discussions on banking beyond branches and its regulation as well as feeding into wider debates on increasing access to financial services for the poor.