By Chaesub Lee, Director of ITU’s Telecommunication Standardization Bureau
The COVID-19 pandemic has highlighted the key role of digital infrastructure and the need to keep investing in our global technological future. Everyone, everywhere, must share in the benefits of digital transformation.
Digital channels – now the main point of access to the formal financial system – have given vulnerable people worldwide an economic lifeline amid the pandemic.
But along with being available and accessible, digital financial services must meaningfully address people’s needs. Cybersecurity, trust, and access to reliable information are nothing less than matters of public safety.
This experience of the pandemic also underlines the importance of the Financial Inclusion Global Initiative (FIGI) – an open framework for collaboration led by the International Telecommunication Union (ITU), the World Bank Group, and the Committee on Payments and Market Infrastructures (CPMI), with support from the Bill & Melinda Gates Foundation.
While financial services have always been a networked industry, we have entered a new frontier in recent years, with mobile phones enabling millions of people around the world to make use of life-changing financial services for the very first time.
Great optimism surrounds the ability of digital channels to expand financial inclusion, and with good reason. Some 1.7 billion adults worldwide do not have a bank account. Among them, however, more than two-thirds have a mobile phone.
FIGI is the successor to the ITU Focus Group on Digital Financial Services active from 2014 to 2016. That was the first initiative to bring together everyone who was working to expand financial inclusion. And it came at exactly the right time.
We saw excellent case studies emerging, as developing countries pioneered the use of digital channels to extend finance to the unbanked. Innovators were finding their feet, assembling the business case for digital financial inclusion and gaining an understanding of new business dynamics. The digital technology and financial service sectors were moving into a new shared space, with resulting convergences in the responsibilities of different regulatory authorities.
Since then, we have come a long way together. We have built a strong understanding of the components of the digital finance ecosystem. We have clarified our respective roles in nurturing the growth of this ecosystem. And we have supported the emergence of a global community where complementary strengths allow us all to advance together.
ITU is dedicated to the pursuit of the Sustainable Development Goals (SDGs) adopted by the United Nations for 2030.
Digital financial services can make a defining contribution to the achievement of the SDGs.
Standardization has been central to ITU work since the organization’s inception in 1865. We work at the cutting-edge of innovation. Technology is always evolving, and ITU’s work and membership evolves in line. But our basic value proposition remains unchanged: building a global community, building trust, and enabling technological advances on a global scale.
Successful standards development calls for inclusive dialogue. By bringing different industry sectors together, ITU helps to define new directions for innovation and create the partnerships required to propel this innovation.
ITU standards for digital finance serve to improve the quality of services, as well as to safeguard security and build trust. By hosting the new FIGI Security Lab for Digital Financial Services, we help regulators and the industry to build on firm technical foundations.
Collaboration through FIGI demonstrates exactly the sort of cohesive action the world will need to fulfil the SDGs.
The initiative has supported national policy reforms to stimulate financial inclusion, working with China, Egypt and Mexico to provide valuable case studies for other countries around the world.
Through FIGI’s three working groups, we have produced a viable basis for digital ID systems to grant citizens access to formal systems of all kinds. We have studied how to incentivize electronic payment as the norm for very low-value transactions. We have also looked at how to boost users’ confidence that their money and digital identities are safe.
After earlier gatherings in Bangalore (2017) and Cairo (2019), this year’s FIGI Symposium welcomed over 1700 participants from 149 countries in an entirely online format, to discuss topics ranging from fintech for inclusion and gender equity to cybersecurity, digital ID and consumer protection. We also heard different experiences with reaching underserved and vulnerable populations during the pandemic. We approached these discussions from every possible perspective, thanks to the diversity of the FIGI community.
I would like to express my deepest gratitude to all FIGI contributors. We can all be very proud of what we have achieved together.
Although this third edition brings the initiative to completion, we have created a culture of collaboration that will sustain discussions for many years to come. The findings of FIGI’s working groups will remain, and we look forward to breaking new ground with you in our Security Lab.
Digital technologies are the unifying force at the centre of our interconnected world, even as COVID-19 raises new questions about how to live together harmoniously, both in times of crisis and times of prosperity.
I look forward to our continued work together to build a better digital future for all.
See the full FIGI video playlist.
Learn more about the ITU Telecommunication Standardization Sector here.