“FinTech continues to be the greatest hope in terms of financial inclusion and inclusive growth,” highlighted Governor Patrick Ngugi Njoroge of the Central Bank of Kenya at the 10th G-24/AFI High Level Roundtable held on 18 April 2018 during the Spring Meetings in Washington, D.C. 

More than 100 senior policymakers, led by 30 Central Bank Governors from emerging and developing countries, discussed aspects of FinTech that hold the greatest potential to support financial inclusion goals.

Leading policymakers addressed regulatory and policy approaches that have created supporting environments for technology-enabled financial inclusion and been implemented by members of both networks.

Given that innovations go together with risks, practical solutions for solving key financial inclusion challenges such as access, and usage of high quality financial services need to be put in place.

“The main concerns of policymakers and industry arise not from the technology itself but from the question of who is applying technology to finance along with the speed of development,” noted Professor Douglas Arner from the University of Hong Kong in his presentation to the Roundtable of G-24/AFI Governors and high-level senior regulators.

Specifically, FinTech has the potential for developing solutions to address digital identity for the financially excluded, as well as sharing useful lessons to effect transformation. Thus, technology can be used to achieve financial inclusion objectives and create efficiencies in the market in terms of costs, transparency, trust in institutions and provide stronger consumer protection regimes.

“The challenge for regulators is how to foster innovation while safeguarding consumer protection and enhancing stability of the financial sector,” Governor of Bangladesh Bank, Fazle Kabir told the meeting.

The roundtable concluded that in the future, FinTech should effectively implement proportionate regulatory regimes that come from practical examples based on peer-learning.

A law to regulate FinTech companies was recently issued in Mexico, which is based on five principles: “to promote financial inclusion, protect consumers, strengthen financial stability, guarantee financial integrity and foster competition among participants,” explained the President of National Banking and Securities Commission (CNBV) of Mexico Bernardo Gonzalez Rosas.

AFI’s partners contributed to the meeting by focusing on the importance of knowledge sharing and capacity building among regulators to support the implementation of key policy enablers.

Finally, strengthening public-private dialogues to enhance better understanding of the role of FinTech in enhancing financial inclusion could be translated into implementing policy and regulatory reforms to catalyze inclusive fintech.

The G-24/AFI high-level roundtable is an important milestone in developing a repository of knowledge on FinTech for financial inclusion.

Key elements of the AFI FinTech for Financial Inclusion workstream are:

• creating opportunities to systematically build a FinTech for financial inclusion knowledge repository for financial regulators;
• enabling test-and-learn approaches on FinTech for financial inclusion on the country level such as Regulatory Sandboxes, Innovation Hubs or RegLabs;
• providing additional regulatory guidance originating from practical examples on risk proportionality and peer learning efforts among regulators;
• facilitating peer learning knowledge sharing and capacity building among regulators to support implementation of key policy enablers;
• incorporating FinTech into national financial inclusion strategies; and
• enhancing public-private and global dialogues, including with developed economies, to enhance understanding of the role of FinTech in enhancing financial inclusion.