BNM & AFI open first member training on platform economies

Platform economies can be a major driver of financial inclusion by connecting marginalized and underserved individuals and small businesses, speakers said during the welcoming remarks at member training co-hosted by Bank Negara Malaysia (BNM) and AFI on July 1, 2019.

Participants from 40 AFI member institutions in 37 countries have gathered in Kuala Lumpur for the three-day event on “Platform Economy and its Promise for Financial Inclusion”, the first AFI capacity building event held on this topic.

BNM’s Ruziana Mohd Mokhtar opened the sessions by outlining FinTech’s potential to transform financial ecosystems in emerging and developing economies, particularly with some estimates putting mobile phone usage at 5 billion worldwide, with more than half being smartphones.

“We are increasingly seeing FinTechs addressing the pain points for underserved groups, which were not addressed by the traditional players,” she said, citing social enterprises, including The Picha Project that harnesses digital technology to empower refugees, particularly women.

“Technology is bringing innovation to every part of the financial ecosystem … unleashing new ways to make lives better.”

Nearly 60 people are attending the event, the second of four capacity building collaborations between AFI and BNM scheduled for this year. Reflecting its popularity, Mokhtar said that the number of participants was the highest of any event the central bank conducted with the network. In February, the two institutions co-hosted member training on instructional strategies.

By the end of this latest training, participants will be able to identify the steps needed to prepare for a shift to platform-based transactions; draw evidence and experience from platform providers in accelerating financial inclusion in preparation for these changes, and; design policy solutions for platform-based transactions from the financial inclusion perspective.

AFI Deputy Executive Director Norbert Mumba explained the significance of Malaysia hosting this event, describing it as a “leading country in the platform economy initiative” that was well-placed to offer “interesting ideas” for regulators to take consider adopting at home. According to FedEx Express, small and medium enterprises in Malaysia had a platform economy adoption rate of 88 percent, well above more developed economies such as Singapore (67 percent) and South Korea (59 percent).

While platform economies hold huge potential, Mokhtar said that regulators must respond to platforms that operate outside of regulatory boundaries due to their potential impact on economic and financial stability.

Among the topics to be covered over the coming days will be data protection and privacy, consumer protection, supervision and compliance as well as implications for the financial inclusion and gender gap. Participants will also be shown how to develop an action plan that can be implemented within their jurisdictions.

“There are risks and pitfalls that we need to be aware of. Things are evolving so fast, as regulators it is hard to keep up,” he said. “Some of these platforms are operating outside of our regulatory boundaries, and yet they are affecting the economic and financial stability.”

The BNM member training will be followed by two days of training held by Visa on “The Future of Commerce”. The global payments platform is a long-standing partner of AFI under its Public-Private Dialogue (PPD) platform – a unique, global platform that links public and private sector actors in order to boost the impact and outreach of financial inclusion initiatives.

AFI’s capacity building service is based on the peer-learning model, in which participants gain knowledge by sharing and exchanging information. Each training event is designed to meet the learning needs identified by members and delivered, most often, by the members themselves ensuring optimal use of the experience and expertise of the network. AFI Developing Capacities for Development (ABCD) is a thriving platform to gain knowledge and practical skills required to realize the financial inclusions goals of financial regulators.