G20/IIF meet discusses gains of public-private partnerships for financial inclusion

The Institute of International Finance (IIF) and the G20 held an international conference on 20-21 February in Sydney, Australia, to explore and discuss effective collaboration between the private and public sectors for economic development.

Five members represented the AFI: the central banks of Brazil, the Philippines, Russia, and Thailand, and the Turkish Treasury. AFI Executive Director Alfred Hannig participated as a panelist in the “Role of the private financial sector community in supporting the G20 development agenda: Financial Inclusion” panel session held on the morning of the 21st.

Over the two days of meetings, there was a clear understanding that emerging markets are the future and will continue to be a primary focus of the G20 agenda for 2014 and beyond. With 117 member institutions from the developing and emerging world, the AFI Network is well placed to make a significant contribution to this agenda. The organization is home to the vast majority of the world’s unbanked, and also represents the global leaders in financial inclusion policy innovations. The meeting was a valuable opportunity to highlight those innovations and experiences.

During the discussions on global standards for financial inclusion it became clear that flexibility and consistency were two of the most important elements from both the regulators and the private sector point of view. “Global regulatory consistency does not mean one size fits all,” said Prasarn Trairatvorakul, Governor at the Bank of Thailand. “It is important to strike a balance between harmonization and sufficient flexibility to reflect local context.” Basel Committee for Bank Supervision (BCBS) Secretary General Wayne Byres echoed this view, saying: “The last thing global standard setters want is a monolithic rule book, aiming for consistency but not a single set of rules.”

The second day panel session on the role of the private sector saw a wide ranging discussion on financial inclusion technology, innovations and policy. Mr. Hannig highlighted the incredible growth of digital financial services in the developing world, noting that in nine African countries there are now more people with mobile money accounts than bank accounts. The expansion of these mobile money services into financial intermediation to include microsavings and small credits was also mentioned by Mr. Hannig as a signal of how rapidly digital services are expanding and developing, and of how much the involvement of the private sector will be key to maintaining this momentum.

The panel members agreed peer to peer collaboration among and between regulators and the private sector would be key to finding successful, long term financial inclusion solutions that will ultimately be profitable and advantageous to the private sector, as well as provide safe and secure opportunities for the world’s unbanked.

Or as IIF President Tim Adams stated in his opening remarks: “Financial inclusion should be one of the key topics for G20. It’s a great opportunity for business and also the right thing to do.”