12 December 2018
Alliance for Financial Inclusion (AFI), as a co-founder of Financial Inclusion for the Arab Region Initiative (FIARI), appreciates our members and counterparts in this region carrying forward the Sochi Accord on FinTech for Financial Inclusion, said Dr. Alfred Hannig, AFI Executive Director in his opening remarks at the 2018 Arab #FinTex Symposium in Abu Dhabi.
Financial technology (FinTech) is leading to rapid innovations in the financial services industry with the power to enhance financial inclusion by focusing on closing the gender gap, managing climate change risks, lowering the cost of cross-border remittances while also promoting financial stability and integrity, Dr. Hannig emphasized.
In his speech, Dr. Hannig highlighted that the 2018 Arab #FinTex Symposium is an opportunity to examine how blockchain and similar technologies can advance financial inclusion and help improve the lives of the poorest groups of society, especially women, forcibly displaced persons (FDPs), youth, those affected by climate change.
“While there are obvious benefits, there are new/emerging risks of technology that are outside the conventional prudential responsibilities of financial regulators. There are also open, unexplored themes and questions such as the one discussed here at this Symposium, about blockchain technology and its potential to advance financial inclusion,” Dr. Hannig cautioned.
The AFI Executive Director invited participants to consider how harnessing technology can address the quality and usage of financial services, and enhance consumer empowerment and market conduct.
“[Technology] is of importance in this region as, according to the IMF, initial FinTech innovations predominantly took place in the payment segment with so far, limited impact on financial inclusion,” he said.
He explained that these technologies should withstand the basic regulatory mandates related to consumer protection, integrity and financial system stability, and reach those that need it the most — the poorest segments in each of the countries in the Arab Region, especially women, FDPs, youth.
“It is important to draw linkages of blockchain from the perspective of usability towards the customer segment we are targeting, which is the most vulnerable groups of our societies,” Dr Hannig said. He further added, “AFI commends the Arab Monetary Fund (AMF) the launch of the FinTech Working Group and FinTech Action Plan — part of FIARI. We hope that these will shed light on how financial inclusion can benefit from blockchain technology.”
As the Alliance continues its close cooperation with the FIARI members, its focus within the FinTech for Financial Inclusion Agenda is on capacity building and training, mutual learning including the engagement with advanced economies, dissemination of knowledge products, additional regulatory guidance, and in-country implementation.
Hannig’s comments follow on from the Sochi Accord, which AFI members successfully launched in September 2018 as a global commitment to explore technological innovations, that advance financial inclusion.
He also used his speech to share the four pillars of AFI’s framework on FinTech for Financial Inclusion: Digital ID and eKYC; Open Electronic Payment Systems; Account Opening & Digitisation of Payments; and Design of Digital Financial Market Infrastructure and Systems. These pillars provide 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 2018 Arab #FinTex Symposium is being held on 12-13 December and will see a range of topics discussed including digital currencies, cross border retail payments and blockchain.