The Digital Financial Services Working Groups (DFSWG) and Global Standards Proportionality Working Groups (DFSWG) concluded their meetings in Accra, Ghana on Thursday after 4 days of productive discussions.

Welcome remarks were delivered by Bank of Ghana’s Deputy Governor, Dr. Johnson Asiama and AFI’s Executive Director, Dr. Alfred Hannig, after which, participants from both Working Groups discussed AFI’s overall working group strategy, FinTech and RegTech issues, cross-border remittances and were presented with an overview of the financial inclusion initiatives in Ghana.

Among the highlights of the first day was an open debate, moderated by Dr. Hannig, on AFI potentially developing a “set of standards” or indicators for members adoption or benchmarking. Dr. Hannig challenged the participants to rethink their definition of what a “standard” is and what an AFI “standard” might consist of, while stressing the importance of maintaining AFI’s core value of using a bottom up approach to its policy work. Dr. Hannig noted that, “With financial inclusion now a firm part of the mainstream international development and regulation discussions, it is only a matter of time before international standards are developed. The question we must ask, therefore, is whether we want those standards to be developed by the AFI membership, or imposed upon it.”

While the idea of AFI developing financial inclusion standards was broadly supported, AFI members urged a measured and inclusive approach. This issue will be on the agenda of upcoming AFI Working Group meetings and will be part of the discussion in the 2017 AFI Global Policy Forum in Egypt this September.

Working Group members then divided into their respective groups and spent the next days in focused discussions on their specific areas of expertise.

DFSWG members were asked to provide an overview on policy changes which had taken place in their countries with the support of AFI. Updates were provided by representatives of 24 institutions, each giving specific examples the progress that has been in their home countries with the support of AFI. Among the highlights; Ghana passed a deposit insurance Act and signed an MoU with the National communication authority to assist in the regulation of the mobile money space; Brazil developed a national strategy for SME, Consumer Protect data, financial inclusion and financial literacy; and Tajikistan passed a payment systems law and developed regulations to oversee the payment systems and RTGS.

The DFSWG then conducted a series of Peer Reviews for recent policy initiatives by Da Afghanistan Bank, Banco Central de Timor-Leste and Central Bank of Sudan. In later sessions AFI partners Letshego and UNCDF were invited to brief DFS WG participants on Proliferating Financial Services in Rural Areas (Letshego) and Regulatory Impact Assessments of DFS Regulations (UNCDF).

During the meetings, DFSWG agreed to establish 4 sub-groups on FinTech & RegTech, Cross-Border Remittances, KYC Innovation, and Interoperability. These groups will undertake focused study and conduct surveys on their respective areas, with a goal of producing in-depth guideline and policy notes to help AFI members better understand these issues. The results of their work will be presented at the 2017 AFI Global Policy Forum.

The GSP Working Group sessions followed a similar theme, reviewing the latest policy changes in GSP related issues, defined activities and knowledge products to be developed. The tour de table highlighted that many members of the group are working on implementing biometric identity and verification procedures, and exploring the potential of regulatory sandbox approaches to promoting FinTech innovation. The group agreed on the need to produce guidance on proportionality in deposit Insurance and shared progress in implementing simplified due diligence (SDD) to ensure AML-CFT requirements and financial inclusion innovations can be pursued in harmony. Bangladesh Bank, the Bank of Uganda and the Intergovernmental Action Group Against Money Laundering in West Africa (GIABA) also participated in a panel discussion on the experiences of the assessed and assessors from the recent Financial Action Task Force (FATF) Mutual Evaluation exercises.

One key session of the GSP Working Group was on the outcome of the Global Conference on Linkages between Financial Inclusion and Financial Stability held in Bali, Indonesia in November 2016. Members discussed how to take forward implementation of the “Bali Outcome Statement on the Linkages of Financial Inclusion and Financial Stability” and noted the challenges of demonstrating the linkages and suggested that efforts should be made to get more data in this area, possibly in partnership with academic institutions and international organizations including the International Monetary Fund (IMF), Financial Stability Board (FSB) and World Bank Group.

The GSPWG agreed to define guidelines on Proportionality in Deposit Insurance & E-Money, and on Financial Inclusion and Shadow Banking; to continue to compile case studies on Proportionality in Practice, and to closely monitor the experience of AFI members in undertaking National Risk Assessment and Mutual Evaluation exercises, and in Implementing Basel III standards. The group also agreed to feed into relevant work streams of the global SSBs including the FATF and the FSB work on FinTech & RegTech, as well as De-Risking, which continues to be a prominent concern of many members.

The GSPWG noted important forthcoming AFI events relevant to the group’s workplan including the Joint Learning Program on Proportionate Regulation to be hosted by CNBV Mexico in May, the AFI-BNM global forum on cybersecurity and financial inclusion in August, and the AFI-BNM training on AML-CFT and financial inclusion in October. Finally, the GSPWG elected the members from Bangladesh Bank and the Reserve Bank of Fiji as Co-Chairs to support the Chair Bank Negara Malaysia, and confirmed members from Bank of Tanzania (AML-CFT), Central Bank of Jordan (Basel), Bank of Ghana (Deposit Insurance) and Bank of Russia (Shadow Banking) as subgroup Chairs.

Issues common to both working group meetings were AFI’s efforts to mainstream gender and financial inclusion, how the Working Groups can help to drive progress towards the AFI members Maya Declaration commitments, and issues around cybersecurity.

The gender workstream discussions provided an overview of the landmark AFI agreement, “The Denarau Action Plan: The AFI Network Commitment to Gender and Women’s Financial Inclusion”, which was introduced at the 2016 Global Policy Forum in Fiji. Participants were asked to consider the gender differences in mobile ownership and how women and men use digital financial services in different countries, what digital financial service innovations have contributed to advancing women financial inclusion, and what the DFSWG could do to help to mainstream the theme of gender and DFS. Among the recommendations was an increased investment in sex-disaggregated data and greater efforts to develop gender specific financial literacy programs.

Both working groups also examined the current status of the AFI Maya Declaration Commitments, and looked at how the Working Groups can help support individual members in reaching their targets, as well as encouraging members who have not yet committed, to do so.

Finally, in joint session participants heard about the increasing challenges in financial inclusion being faced by cybersecurity. A panel which included representatives from Bangko Sentral ng Pilipinas, Suricates Solution and AFI’s PPD partner Mastercard looked at the issue from a variety of perspectives giving participants an idea of the impact that cyberattacks can have on financial inclusion platforms. Primary among these risks is the erosion of public trust that can completely undermine financial inclusion efforts.

AFI’s next working group meetings will take place from 13-16 March, when the Consumer Empowerment and Market Conduct (CEMC) and Small and Medium Enterprise Finance (SMEF) Working Groups will gather in the Seychelles.