Bangko Sentral ng Pilipinas (BSP) in cooperation with the Bank for International Settlements (BIS) held a conference from 2-4 June 2016 on the island of Cebu in the Philippines. Entitled “Financial Inclusion and Central Banks”, the conference brought together high-level central bankers from Asia along with key development partners and notable academic researchers. The conference was focused on exploring the research and data on relationships between financial inclusion and central banking.

The opening ceremony included statements from BIS Chief Representative, Eli Remolona and BSP Governor and former AFI Chair Amando M. Tetangco Jr. who emphasized the need for greater research coordination and described how regulators were increasingly using test-and-learn approaches to stay abreast of the risk implications in new business models. While rapid development of new technology brings many challenges and changes, Governor Tetangco saw these developments as a great opportunity noting that, “technological innovation is the driver of financial inclusion.” Mr. Remolona also emphasized the importance of greater collaboration and cooperation between national regulators and international standard setting bodies. He complimented the role of BSP as an early leader and champion for financial inclusion and noted how BIS is now benefiting from the practical research and lessons of BSP.

The AFI network was born in Southeast Asia and has its headquarters in Malaysia. The region is home to many of the network’s leading institutions and most innovative policy initiatives. In addition to Governor Tetangco, high-level AFI members taking part in the conference sessions included the Governor from the Bank of Thailand and the Assistant Deputy Governor from Bank Negra Malaysia. The conference was an opportunity to understand how the experience and knowledge of a wide variety of stakeholders was being translated into strategic priorities. Sessions held over the 2 days of the conference explored the current trends in digital financial services, contagion risks, financial literacy and household debt, and inclusive monetary policy strategies, which have been revealed through extensive research and new data.

AFI’s Executive Director, Alfred Hannig, took part in the overview session ‘Finance, Growth and Inclusion’. The session was chaired by BSP Deputy Governor Nestor Espenilla, and featured presentations from Mr. Hannig and Thorsten Beck of the Cass Business School. The session examined some of the identified barriers to widespread adoption of financial inclusion and presented preliminary research that suggested where resources might be invested to overcome these barriers.

Mr. Beck argued for a focus on macroeconomic stability, capacity building and effective regulatory frameworks. He also urged participants to look beyond traditional banking systems and create an enabling environment that encouraged and supported new providers, products and delivery channels.

Mr. Hannig also focused on the benefits of capacity building programs, as well as SME Finance and national financial inclusion mandates for financial regulators. Based primarily on data derived from the recently launched AFI Data Portal, Mr. Hannig showed preliminary research findings that indicated an increase in the impact and effectiveness of financial inclusion progress for AFI members which had invested in these areas. AFI’s Executive Director also highlighted the impact of regulators taking a leadership role in the promotion of financial inclusion. He showed how institutions with national strategies, publicly declared targets and dedicated resources not only appeared to achieve better results with specific internal targets, they also contributed to a more a general acceptance and trust of financial inclusion platforms.

The value and potential impact of obtaining better data was a theme expressed throughout the conference with further investment in research and data seen as a fundamental part of financial inclusion’s future. While the high importance of AFI’s practical work in driving policies through peer learning and knowledge sharing was acknowledged, the clear message coming out of the conference was that an investment in better data could exponentially expand the impact of financial inclusion policy initiatives. Not only would better data lead to a more rigorous analysis and solid empirical evidence to help design more effective future policy, it could also provide a rich resource of evidence to demonstrate the impact, or lack of impact, for those policies which have already been implemented.

Based on the discussions around this conference, AFI will investigate the viability of a special roundtable session at future AFI Global Policy Forums. The roundtable would be dedicated to sharing recent research findings from financial inclusion stakeholders on the policy impact of specific solutions including, financial literacy, interoperability, mobile money and, risk based proportional approaches. Through this proposed roundtable the kinds of insights presented in Cebu can be shared more broadly with the entire AFI network.

“We must establish a systematic knowledge exchange platform that encourages all stakeholders working in the financial inclusion field to share their experiences”, said Mr. Hannig. “A common commitment to gathering and properly assessing financial inclusion data will lead us towards more effective and more efficient policy decisions.”

The conference comes at a time when financial inclusion has become a primary focus for the international community. The 2015 United Nations Sustainable Development Goals and supporting Addis Ababa Action Agenda put financial inclusion policy firmly in the spotlight. They also emphasize the need for a country-led approach to development, the requirement for good data and place a strong focus on the benefits of the kind of peer-to-peer knowledge exchanges for which the AFI network is known.