ITU tackles financial inclusion for 2 billion people
ITU focus group on Digital Financial Services hosts telco and financial
services regulators from across the globe in Kuala Lumpur
Almost a year after its launch, the ITU Focus Group on Digital Financial Services (DFS) for Financial Inclusion is preparing to host its global meeting to discuss how the international telecommunications and financial services communities can work together to tackle one of the world’s most challenging social and economic issues: access to formal financial services by the world’s poorest two billion people.
The Focus Group, incorporating 60 organizations from some 30 countries, aims to bridge the gap between telecommunications and financial services regulators, and the private and public sectors. Representatives from across the DFS ecosystem will pragmatically address some of the major issues currently preventing DFS from serving the unbanked.
Four working groups have been established, led by a balanced composition of regulatory authorities, operators and consumer protection organizations. They are developing a set of operational recommendations, tools and solutions that will fast track policy reform to support numerous developing countries in implementing the financial inclusion strategy and promoting DFS at scale. Initial findings will be discussed in Kuala Lumpur from 30 September to 2 October and at the next meeting in Geneva in December. Final reports are expected to be published late in 2016.
“By leveraging the rapid growth of existing mobile networks and the use of cell phones, the majority of cash transactions can be shifted into digital form,” said Sacha Polverini, Chairman of the Focus Group and Senior Programme Officer for the Bill and Melinda Gates Foundation. “Innovative digital payment systems can reduce transaction costs up to 90 per cent, giving financial institutions, mobile network operators and a new set of service providers the ability to create innovative new financial products tailored to the needs of the poor.”
Regulation is a key factor. However, the payment industry has found it challenging to launch and scale services for the unbanked – an issue that affects up to 2 billion people globally, the majority of which are based in India, China and Indonesia. This is because many policy and regulatory environments are not genuinely enabling the organic development of a competitive DFS ecosystem that can reach the poor. In addition, the conversation around DFS has primarily taken place at a national level and between financial service regulators and standard setting bodies.
After Kuala Lumpur the Focus Group will hold its next meeting in Geneva from 15 to 17 December 2015 when in-depth discussions are expected to take place. The meeting in Geneva will be preceded by a one-day workshop on Digital Financial Services and Financial Inclusion.
Source: Press Release