Digital Financial Services for Financial

Inclusion

John Owens, Senior Policy Advisor, AFI

26 March 2015
Bangkok, Thailand Bringing smart policies to life
 Global Financial Inclusion Indicators
2.5 billion of adults do not have access to formal
financial system

Source: Demirguc-Kunt & Klapper (2012), World Bank Policy Research Paper 6025

AFI | Alliance for Financial Inclusion Bringing smart policies to life

 Overview of AFI

AFI is a global network of policymakers in developing and emerging

countries

•Founded in 2008, AFI’s goal is to support developing countries to develop

and implement successful financial inclusion policies

•The goal of the AFI network is to accelerate the adoption of innovative

financial inclusion policy solutions, with the ultimate aim of making financial
services more accessible to the billions of people who do not have access
to the formal financial system.
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The AFI Timeline
2008 2009 2010 2011 2012 2013-2015 2015-
Building Activating Enhancing Policy-
Concept Transition
the the Network Driving Independence
design Planning
Network Network value Network

• 125 Institutions, 95
countries
• Unique Peer Learning
network (working
groups)
• G20 Implementing
partner
• Maya Declaration
• More than 70 tangible
policy reforms

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 Growing Relevance of
Financial Inclusion Globally

• Financial Inclusion is no longer only a development concern

but a cornerstone of economic development framework and
model
• Ministries of Finance and Central Banks are including Financial
Inclusion in their mandate together with stability and integrity
• Financial Inclusion is more and more understood in a broad
framework including access, usage and quality of a range of
financial services
• Developed countries are increasingly facing financial exclusion
problem

• G20 recognizes the benefits of financial inclusion for inclusive

growth, stability and integrity

AFI | Alliance for Financial Inclusion Bringing smart policies to life

Opportunities

• Growing alignment of interests among governments,

private sector and global community
• Greater understanding on the issues related to financial
inclusion as well as more data
• Recognition of country specific conditions and developing
and emerging country-led approaches
• More open communications with International Standard
Setting Bodies
• Technological innovation and enabling regulatory
framework are driving new digital financial service
models that support financial inclusion

AFI | Alliance for Financial Inclusion Bringing smart policies to life

Benefits & Opportunities of
Digital Financial Services

AFI | Alliance for Financial Inclusion Source IFC Infographic: Bonny Jennings www.itldesign.co.za
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Key Models of Digital Financial
Services

E-money Services

Mobile Financial Services

Use of Agents

AFI | Alliance for Financial Inclusion Bringing smart policies to life

Convergence & Interoperability

Financial
Inclusion

AFI | Alliance for Financial Inclusion Bringing smart policies to life

DFS Policy, Regulatory and Oversight
Proportionate AML/CFT
Tiered KYC Regulations
•

E-Money Operator Regulations

Remote Account Opening Rules
Agent Regulations
Interoperability
Fair access to ICT
Security and Fraud Mitigation
Consumer Protection Issues

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Regulatory Coordination

• Telecom operators as financial service

providers & banks as telecom operators
• USSD, Fair Access, Data Security
• Who provides oversight?
• Overlapping issues among regulators
• Coordination is critical and needs to be
improved

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Bangladesh: Mobile-Enabled Agent
Banking Success
Bangladesh Bank’s Role:
Results:
 Agent Banking & Allowable
Services  540,000 active agents
 Eligibility Criteria for Agents  25.2 M registered clients
 Allowance of Non-Exclusive  12.2 M active clients
Agreements

 Risk & Operational Issues

 Consumer Protection Principles

 Coordination with BRTC
AFI | Alliance for Financial Inclusion Bringing smart policies to life
Philippines: Mobile-Enabled E-Money

• E-money regulations clearly

set forth by Bangko Sentral ng
Pilipinas
• E-money issuers under
Central Bank Supervision
• Agent guidelines issued
• Tiered KYC process
• Partnerships promoted with
the financial sector
• Interconnectivity between
financial players, payment
operators and e-money
issuers
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Solomon Islands: Mobile Banking for
Financial Inclusion

Central Bank of Solomon Results:

Islands:  From 80% without a bank
account 5 years ago, 80%
 Agent Banking now have access to basic
Regulations banking services

 Expanded Eligibility
Criteria for Agents

 Tiered KYC Regulations

 Public Private Sector

Dialogue

 Financial Literacy and

the role of the Private
Sector
AFI | Alliance for Financial Inclusion Bringing smart policies to life
 Thank you!
John.Owens@afi-global.org
@NewsAFI

Bringing
smart
policies
to life info@afi-global.org
www.afi-global.org
Bringing smart policies to life