Data analytics reveal insights into financial literacy challenges for women, outcome of CEMC & FID Working Group meetings in Mexico

“As technology increasingly drives financial services for the financially excluded, regulators must see to it that this growth is matched by mitigations for the digitally vulnerable,” emphasized Christine Alupo, Director Board Affairs from Bank of Uganda while attending the 15th Consumer Empowerment & Market Conduct (CEMC) and 17th Financial Inclusion Data (FID) Working Group meetings in Mérida, Mexico.

After the first day of convergence on 5 March 2018, members gathered in their respective working groups to discuss cross-cutting policy topics with implications across every financial inclusion policy area including trends in financial consumer protection policy and regulation, and various data challenges related to gender, national strategies, and digital financial services.

Engaging discussions at the CEMC Working Group meeting highlighted key challenges that digitization of financial services pose to enhancing consumer protection — a “digital divide” that creates inequality among digitally literate consumers and the ones that have access to such knowledge but do not possess the adequate skills to grasp its benefits.

During the FID Working Group meeting, Dr. Settor Amediku, Head of Payment Systems Department from Central Bank of Ghana remarked that “before you can come up with a policy, you need data in order to be capable of assessing the intended outcome,” supporting discussions on the importance of data in decision-making especially in diagnosing the state of financial inclusion.

“With data, we can identify main gaps, trends and implement smart, evidence-based policies in financial inclusion,” reiterated Anna Vardikyan, Coordinator of Financial System Stability and Development from Central Bank of Armenia. Once analyzed, data can be used to better inform policymakers in setting appropriate targets according to institutional capacities and users’ financial capabilities.

However, data is not an end; it is a mean to help countries monitor progress consistently and eventually assess the long-term effect of public policy. Developing a common framework to measure progress under certain core indicators could be an effective tool to promote sustainable financial inclusion.

Interestingly, available data can provide untapped opportunities to better understand the needs of the unbanked and tailor financial products to meet their needs. However, the use of personal data has certain implications not only to potential users of financial services, but also in the regulatory space.

In order to avoid risks such as data privacy, fraud and lack of proper identification documents, policies and regulations should be put in place to ensure safe and secure delivery of innovative financial services. A key component discussed includes implementing a responsible code of conduct for financial services providers that has a strong foundation on financial literacy, especially for vulnerable segments of the population such as women.

According to a recent survey conducted by AFI, less than half of respondents have a formal national strategy to enhance financial literacy. 15 percent of total respondents have specific indicators for monitoring the progress of financial literacy towards women.

“One of the most pressing challenges is how financial inclusion can be improved through a sound financial literacy program for women,” highlighted Marie-Jose Ndaya Ilunga, Deputy Director from Banque Centrale du Congo during the CEMC Working Group meeting.

To better address consumer protection for women, one of the main outcomes from the CEMC Working Group meeting was the creation of a new Gender Subgroup, led by the Banque Centrale du Congo. New Chairs for the Financial Literacy Subgroup were elected including Central Bank of Colombia, Central Bank of Egypt and Central Bank of El Salvador. The CEMC Working Group has set a target to deliver three knowledge products by the Global Policy Forum (GPF) in September 2018.

Meanwhile, Data2x presented Chile’s journey from 2001 that has guided gender policies and informed financial service providers to reduce the financial inclusion gap through sex-disaggregated data.

The last of the 4-day event will have members attend an AFI Public-Private Dialogue (PPD) training on “Consumer Empowerment and Data.” The training will provide practical examples on the interlinkages of data usage to better understand consumers and repercussions on data privacy.

Introduced during the FID Working Group meeting, the AFI Data Portal 2.0 is a new and improved version of its predecessor; a more user-friendly and dynamic platform that integrates AFI’s global database on financial inclusion policies and regulations. The new features of the portal include its availability in three languages (English, French and Spanish); easy access through mobile and tablet: enhanced search functionality and faster loading and downloading time. Access now at www.afi-dataportal.org.