Your Excellency, Mr. Vincent Meriton, Vice-President Republic of Seychelles

Honorable Ambassador Maurice Loustau-Lalanne, Minister of Finance, Trade, Investment and Economic Planning, Republic of Seychelles

Ms. Caroline Abel, Governor, Central Bank of Seychelles

Ms Carolin Geginat, Programme Leader, World Bank Group

Distinguished Guests,

Ladies and Gentlemen,

Welcome to Paradise!!

Good morning and a very warm welcome to you all to this beautiful island nation of Seychelles.

Allow me to express my gratitude to the Central Bank of Seychelles, Financial Services Authority, and respective ministries for the warm reception accorded to all of us and the fantastic arrangements put in place. It is a great pleasure for me to be here in this beautiful country. Special thanks to the World Bank for their active role in organizing this event.

Ladies and gentlemen allow me to express my utmost gratitude to Ms. Caroline Abel, Governor of Central Bank of Seychelles and her wonderful team at the Central Bank of Seychelles for their endless support and excellent arrangements in hosting and organizing this important workshop on fintech.

The Central Bank of Seychelles has been a principal member of the Alliance for Financial Inclusion (AFI) since 2014 and has been actively participating in working groups and regional initiatives on topics such as digital finance, SME financing and consumer protection.

Let me start by providing some thoughts on the intersection between technology and policy especially in the context of the growing use of technology and data in the delivery of financial services.

Consider this,

• Mobile phones are now used by two thirds of the global population. In this part of the world, we see smartphone adoption rates touching 60% by 2020. Globally, smartphone adoption is expected to reach 80% by 2025. Reducing cost of smartphones is driving this adoption.
• Mobile phones are also becoming the primary medium for internet access, fueled by falling data prices. Here in Seychelles, 70% of the population accesses internet through mobile phone.

Now, what are the implications of growing use of mobile phones and the internet?

• There is pervasive digitalization with information and data glut. 90% of the data that the world has ever generated, was generated in the last two years.
• We create colossal amounts of data every single minute in the form of clicks, likes, searches, swipes, shares and streams. Just as I speak, in the last one minute there have been 3.9 million google searches, 4.3 million YouTube streams and approximately 120,000 visa payments.

In fact, I remember on one of the days in March this year my entire team back in the office was looking restless and distressed. Turns out, Facebook and Instagram were down for more than 10 hours. I also read about people calling police stations to report the outage!

Increasing digitalization is also transforming payments and financial services. Innovations such as big data analytics, cloud computing, artificial intelligence, digital identity, blockchain are already disrupting financial services both at the front-end (such as product development, user experience and interface) and the back-end (such as interoperable payment infrastructure, alternative credit assessment models and digital identity platforms).

Ladies and Gentlemen, let me now talk about how FinTech can be leveraged to advance financial inclusion especially in the context of small island states such as Seychelles.

• Enhancing Usage and Quality of Financial Services: The days of traditional financial institutions being the sole providers of financial services is over. Innovations in technology is leading to integration disaggregation and fragmentation with fintech companies, start-ups offering specialized products/services. Further – technological developments such as cloud computing, application programming interface (API) and digital identity enable complex partnerships and interoperable ecosystems. These ecosystems help fintech providers to move beyond basic cash-in/out services to value added financial services such as savings, credit, micro-insurance and cross border remittances. These innovations are already unfolding with products such as remittance linked savings, insurance for disaster resilience, micro-pensions etc. I am sure these innovations, especially from the context of small islands nations, will be discussed in detail during the workshop proceedings.
• Broadening New Avenues of Financings for MSMEs: MSMEs are the backbone of a country’s economy and employment. The contributions of MSMEs cut across all sectors mainly in the areas of tourism, fisheries and agri-value chain and contribute to the growth and livelihood of island communities. However, a financing gap persists and impedes the development of MSMEs. Given the lack of collateral, business and financial records – there is a need for financing based on alternative credit infrastructure/assessment models. With the emergence of fintech platforms, Bigdata and Industry Revolution 4.0 that enables use of soft data such as mobile phone usage, digital payment records and psychometric data to assess credit-worthiness to offer “remote, quick and automated” credit to individuals and MSMEs. These models are proliferating in many parts of East Asia and Sub-Saharan Africa and can hold promise here too.
• DFS & Fintech as a Resilience Tool: Over 200 million people are currently affected by environmental disasters globally, costing world economy hundreds of billion annually and displacing thousands of people every day. Specifically, small island communities are vulnerable and bear the brunt from adverse impacts of climate change. Digital financial services and fintech can be an important tool towards resilience, recovery and adaptation in the face of shocks related to climate change. We have already seen how mobile money has been used as a disaster recovery tool in places like Fiji, Haiti and the Philippines. Financial policymakers and regulators in the AFI network recognize the dual threats of financial exclusion and climate change as key barriers to financial stability. In this regard, AFI has started a workstream on Inclusive Green Finance which will look at leveraging digital financial services tools to build resilience and adaptation.

Apart from the three areas mentioned above, financial inclusion gender gap is another cross-cutting issue. It is hearty to note that Seychelles has been successful in addressing this issue, with Governor Abel leading from the front. We look forward to learning from Seychelles as AFI network works towards reducing the gender gap.

Ladies and Gentlemen – as we can see, technology is breaking geographical barriers. Fintech is bringing communities together by bridging distances and flattening mountains. I provide two ideas to facilitate fintech development without compromising the stability and integrity of the financial sector.

• Enabling Policy and Infrastructure: Innovative technology based financial services demand a relook at the existing regulatory structures. There is a need to come up with innovative regulatory approaches such as regulatory sandbox, regtech and policy innovations such as digital identity/eKYC, data protection and privacy frameworks. Further, fixing regulations is only half the job. Frugal innovations to create digital and financial infrastructure is the need of the hour. We need to build solar and other renewable sources to meet our energy needs; set community networks and hubs for stable internet connectivity; and leverage cloud-technology and – where possible – shared platforms for financial services.
• Collaboration and Partnerships: Technology is borderless, but our jurisdictions have borders. So – as a first step, we regulators need to collaborate at domestic, regional and global level. It is in this endeavor that we have AFI member countries from Ghana, Morocco, Kenya, Thailand and Bangladesh contributing in this workshop and we thank them very much for that. Further, we need to proactively reach out to the industry, academia, researchers, innovators and technologists to co-create solutions to advance financial inclusion. I am confident that this workshop is one of the many initiatives to facilitate stakeholder collaboration.

AFI, as a policy leadership alliance, through our member-driven and bottom-up approach recognized the need to align  the opportunities inherent in emerging financial technologies and this effort has resulted into the creation of our FinTech for financial inclusion framework – a powerful tool to help fulfil the aspiration of an inclusive and equitable financial economy. Ranging from eKYC to open/electronic payment systems, this framework provides a foundation for an evolving digital financial ecosystem.  My colleagues will provide further details on the framework during their intervention.

AFI network emphasized as priority, the focus on new FinTech approaches as enablers to the achievement of their financial inclusion targets and Maya commitments on Digital Financial Services (DFS), hence, the widespread endorsement and adoption of the Sochi Accord on Fintech for Financial Inclusion, , at the previous annual Global Policy Forum (GPF) in September 2018, in Sochi, Russia.

The Sochi Accord is a key anchor to encourage the network to leverage the potential of FinTech to advance financial inclusion as it provides a framework for AFI members to adopt and continuously adapt innovative new technology-based financial services, or FinTech, to advance financial inclusion for the world’s 1.7 billion unbanked.

To complement this achievement of synergy amongst member nations and partners, specific initiatives are being implemented to take forward the promise of inclusive growth even at the regional level.

Ladies and Gentlemen – the future of financial inclusion as well as the wider financial services will continue to be shaped by technology. While there are obvious benefits, there are new/emerging risks resulting from use of technology, which may fall outside the conventional prudential responsibilities of financial regulators.

Allow me to end with a call for action to all regulators, market players and other stakeholders in the eco-system to leverage digital technologies in a responsible and safe manner to reach out to vulnerable sections of the society such as the poor, women and forcibly displaced persons. The need for better market conduct and enhanced financial capability is never out of fashion even in the advent of the glory of financial technology.

With that ladies and gentlemen, I conclude my speech and extend invitation to this year’s AFI Global Policy Forum in Kigali, Rwanda from 11 – 13 September 2019. Under the theme ” Using Technology for Inclusion of Women and Youth” we are now working closely with National Bank of Rwanda to create a milestone event.

Thank you for your attention.