By Maya Taylor, Web Content Writer, AFI

This blog emerged following a discussion with Yury Bozhor (Bank of Russia), Raymond Estioko (Bangko Sentral ng Pilipinas), Ricardo Estrada (formerly at Superintendencia de Bancos de Guatemala and AFI), Clarissa Kudowor (Bank of Ghana), Sulita Levaux (AFI), Mikhael Mamuta (Bank of Russia), Ghiyazuddin Mohammad (AFI), Elly Ohene-Adu (formerly at Bank of Ghana) and Olga Sorokina (Bank of Russia).

Of the various pathways explored to accelerate financial inclusion, none have shaped our collective lives more dramatically than digital financial services (DFS). Offering untold potential to boost the speed, accessibility and safety of transactions – all while lowering costs – they continue to define our shared mission to leave no one behind, under the guidance of the Digital Financial Services Working Group (DFSWG).

Recently, I had the privilege of sitting down with a handful of prominent members – both past and present – who had helped shape the working group since its launch a decade ago. Over the hour-long call, the lasting affection felt towards their time spent steering the innovative workstream was clear, along with the deep understanding of how its work would define financial inclusion policy for years to come.

Among them was Bangko Sentral ng Pilipinas’ (BSP) Raymond Estioko, one of the working group’s earliest chairs from the days when it was still called the Mobile Financial Services Working Group, who spoke of the satisfaction that came with strengthening DFS policy and regulation to enhance financial services at home and beyond.

“DFSWG has been very helpful to BSP … we have benefited much from the efficiency of having readily available references that the working group has painstakingly put together,” he told his peers.

From the onset, DFSWG’s primary focus was on creating an enabling environment for DFS as tool to amplify financial inclusion. Within a few short years, it had published a seminal guideline note on basic terminologies, described by Bank of Russia’s Mikhail Mamuta as “crucially important … as you need to know what you’re talking about to speak the same language”. The publication was so in demand, our experts noted, that printed copies quickly ran out at the 2012 AFI Global Policy Forum in Cape Town, South Africa.

Another landmark moment came in 2014 when the working group expanded its focus to incorporate all things digital – changing its name to DFSWG in the process –, reflecting the need to explore new technological innovations and assist jurisdictions in adapting to them. By this time, mobile banking platforms had long been in use – Kenya’s groundbreaking M-Pesa was launched in 2007 – and DFSWG’s response was to safeguard the road ahead with timely guideline notes on supervision and oversight, interoperability, cross-border payments and consumer protection.

Since then, DFSWG has become a working group of superlatives: AFI’s biggest working group (currently 130 members from 70 member institutions in 64 countries)with both the highest number of attributable policy changes (184) and capacity building events (13 in 2019-2020 alone, more than all other working groups combined). Equally impressive is its catalogue of knowledge products with 21, including AFI’s most-viewed publication: FinTech for Financial Inclusion: A Framework for Digital Financial Transformation, developed with AFI’s Global Standards and Proportionality Working Group.

But despite setting the bar high, our working group experts reiterated how its work must not be done in silos. To truly help those at the bottom of the economic pyramid, Elly Ohene-Adu, formerly at Bank of Ghana, reiterated that more needs to be done to reach across thematic areas and effectively support disadvantaged groups, such as women, youth and rural communities.

“More financial literacy should be done in rural areas, which are the food baskets of most countries,” she said. “We need to find a way to onboard and empower them digitally for greater financial inclusion”.

Here, significant headway has already been made, as evidenced by recent reports and policy frameworks that are guiding regulators in enhancing sustainable access, use and overall quality of financial services, particularly amid the ongoing coronavirus pandemic.

While the spread of COVID-19 has thrown our collective futures in a spin, it has also cemented DFS’ pivotal position in the preservation and continuation of financial systems. During these tough times of declining demand, reduced supplies and tightened credit, digital services have helped keep individual daily activities going by, among other things, reducing the potential risk of physical contamination.

In the face of such limitations, DFSWG ramped up its webinars to enable more peer knowledge exchanges, including one on cross-border remittances that become AFI’s most-attended virtual working group event to date. It has also published four knowledge products since May 2020, reinforcing its reputation as one of AFI’s most prolific working groups. Most recently was a major policy model on consumer protection for DFS, jointly produced with AFI’s Consumer Empowerment and Market Conduct Working Group that focuses on the unique balance between ensuring consumer rights are protected amid DFS’ increasing dominance in financial markets.

Looking ahead, we face many uncertainties but to ensure that we harness opportunities, our experts concurred in the need for greater interoperability, non-discrimination and strong governance that drives sustainability through green and gender-based initiatives. Growth was also expected in digital currencies and digital investments – from crowd funding to digital lending – but one that must be twinned with additional safety measures against digital crime. Striking an effective balance between financial stability and new innovations has never been easy, but the consensus remains that our future is digital and DFSWG comes well prepared for it.