29 June 2020
Ladies and gentlemen,
Warm greetings and welcome to everyone. I hope you are safe and in good health as we convene virtually as the expert group on financial inclusion policy for the region.
Let me start this meeting by thanking everyone for their continued support and time to attend this virtual meeting, considering the new circumstances around how we all live and work, we appreciate the sustained commitment to achieving the financial inclusion objections of the pacific region and individual member countries.
As you will recall during our first virtual meeting on the 26 March 2020, AFI presented the business continuity plan, that has since been applied as a response to the global spread of the coronavirus and canceled physical AFI events. The plan highlighted the adoption and use of virtual meetings and other digital channels, such as this meeting, as an alternative mode of ensuring continuity and achieving deliverables agreed with members.
It is worth noting, the excellent work and feats already achieved by the Experts Group on Financial Inclusion Policy (EGFIP) of PIRI, leading the efforts and successfully launching the first coordinated regional regulatory sandbox, designed to encourage the participation of FinTechs in driving financial inclusion goals. Furthermore, the group has been exceptional in actively tackling regional issues around de-risking, climate change and inclusive green finance (IGF), with the adoption of the De-risking Action Plan, overwhelming support for Disaster Risk Reduction framework and PIRI member participation in the new IGF Working Group, respectively.
With this great start and momentum of the PIRI region, permit me to offer the following charge to colleagues:
Financial inclusion, particularly for women has a key role to play in the mitigation, and social and economic recovery from COVID-19. As we see the global health and economic crises disproportionately affect the lives of vulnerable segments especially women and negatively impact their future economic opportunities, amplifying their risk of exclusion, may I, therefore, encourage PIRI leaders and colleagues, to actively work together to achieve the Denarau Action Plan commitment of increasing the number of women with access to quality and affordable financial services in the region and close the financial inclusion gender gap
We achieve this by consciously building financial resilience across all vulnerable groups, investing in gender-focused initiatives, revising and adapting policies, interventions, legislation, and regulation to be gender-sensitive. AFI stands ready to support members on these front and interventions.
Secondly, the implementation of the Pacific Islands Regional De-risking Action Plan will leverage on, and complement, relevant existing and new partner activities that address de-risking in the Pacific region. This is towards a coordinated and coherent approach to stemming or reversing this challenge, under the leadership of the PIRI Leaders.
PIRI will continue to take an open and inclusive approach in implementing the action plan, particularly through the “PIRI Plus” mechanism agreed on in Sydney whereby there will be close engagement with both non-PIRI jurisdictions affected by de-risking and regional partners, including technical assistance providers, developed country regulators and the private sector.
De-risking remains on the agenda of the region. Although only one part of it, the COVID-19 global pandemic has demonstrated that we must ensure remittances can continue to flow into the Pacific region. Remittances average about 10 percent of GDP in the Pacific islands and exceed 40 percent in Tonga and about 15 percent in Samoa and the Marshall Islands. But globally, we are expecting a 20 percent fall in remittances due to COVID-19.
In response to that, the implementation of the action plan is envisioned to prevent any further de-risking so that we can sustain remittance flows, but also maintain important correspondent banking relationships that are vital for financial inclusion efforts in the region.
Thirdly, the Pacific region has throughout been champions of Inclusive Green Finance and I want to congratulate you all for your leadership in this area. The Pacific is indeed one of the regions also hardest hit by the effects of climate change, which we again witnessed when Cyclone Harold hit a number of Pacific Islands during the first half of April. Our thoughts and prayers are with those affected.
I can see how your institutions are stepping up to this challenge and I want to thank you for sharing your conviction and experience with the wider AFI Network.
The IGF Working Group has been established and from the AFI Management Unit we are happy to see several PIRI members represented in the working group. Even with the disruptions of the COVID-19, the IGF Working group continues to progress work on several knowledge products on the promotion, protection, and provision policies.
In addition, a knowledge product reflecting on the role of financial inclusion in disaster risk reduction is also currently being developed for AFI members, this following the great leadership from the PIRI on this topic.
We very much value the leadership from the PIRI on this crucial topic and thematic area and I want to congratulate you on this. Now is the moment to push forward and to take one more step towards a greener and more inclusive society. From the AFI Management Unit we are here to support you with this, we commit to embarking on this journey with you.
Finally, financial technology presents far-reaching opportunities to deepen financial inclusion and strengthen financial stability and integrity. With the PIRI Regional Regulatory Sandbox acting as catalyst to deliver the gains of inclusive FinTech in the region, the potential for relevant and positive impact is real and evident from the interest received from local and global financial technology firms interested in participating in controlled pilots on innovative digital financial services and other solutions such as e-KYC, digital identity verification, remittances, digital payments and more much, in participating PIRI member countries.
Clearly, the future of financial inclusion as well as broader recovery from the global emergency will continue to be shaped by technology. While there are obvious benefits, there exist new and emerging risks of technology that are outside the conventional prudential responsibilities of financial regulators, I would therefore like to encourage colleagues and PIRI leaders present here today, to discuss and agree on approaches to take forward these remarkable interventions around the access, usage and quality of financial services, financial health of vulnerable groups, recovery of MSMEs and how shared insights can be drawn upon to enhance regulatory supervision, consumer protection and market conduct.
Ladies and gentlemen, allow me to reiterate my call for action to colleagues and PIRI leaders present, that we take forward the de-risking action plan in the region to support safe and affordable remittances and digital payments, and also leverage digital technologies in a responsible and safe manner as we reach out to vulnerable segments of the society such as the poor, women, MSMEs and displaced and affected persons from climate change related events.
It is our hope that the insights drawn from the deliberations on this meeting will make clear the need for better market conduct and enhanced financial capability which is never out of fashion even in the advent of the glory of financial technology.
I wish you all a fruitful meeting. Thank you.