*The following article is based on my remarks this morning at the FIGI Security Clinic at ITU headquarters in Geneva, Switzerland — a two-day clinic focused on securing the infrastructure and applications of digital financial services.
Today we see great optimism surrounding 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, but among them, 1.1 billion have a mobile phone.
Developing countries are capitalizing on the widespread use of mobile phones and information and communication technologies (ICTs) to bring all people within reach of financial services and out of poverty.
And I’m proud to say that the Financial Inclusion Global Initiative (FIGI) has been instrumental in this effort.
Led by ITU, the World Bank Group and the Committee on Payments and Market Infrastructures, and with financial support from the Bill & Melinda Gates Foundation, the ‘Financial Inclusion Global Initiative’ (FIGI) is a three-year programme of collective action to advance research in digital finance and accelerate digital financial inclusion in developing countries.
The growing FIGI community has been instrumental in providing a solid foundation for the optimism we now see for digital financial inclusion.
FIGI has built a strong understanding of the components of the digital finance ecosystem and where innovation could drive growth and innovation.
“We were seeing excellent country case studies emerging, with developing countries leading the way in the use of digital channels to increase financial inclusion.”
The inclusive, partnership-oriented approach taken by FIGI is a model of collaboration that ITU is pleased to support.
FIGI is the successor of an ITU Focus Group on Digital Financial Services. And FIGI was not the only successor – it also gave rise to another ITU Focus Group to investigate central bank-issued digital currency.
Our Focus Group on Digital Financial Services was active from 2014 to 2017. It was successful in building a clear picture of the digital finance ecosystem. And this work came at exactly the right time.
We were seeing excellent country case studies emerging, with developing countries leading the way in the use of digital channels to increase financial inclusion.
Innovators were finding their feet, developing the business case for digital financial inclusion and gaining an understanding of their ecosystem.
ICT and financial-services companies were moving into new shared space. Each sector was determining the competitive advantages that they could draw from their different expertise.
And this resulted in an associated convergence of the responsibilities of ICT regulators and central banks. With different mandates and expertise, they had different perspectives on the opportunities and risks related to digital finance.
“The entire FIGI community can be very proud to be part of this important work.”
The ITU Focus Group was the world’s first initiative to bring together all actors working in the interests of financial inclusion.
FIGI has maintained this momentum. Diversity is the defining feature of the FIGI community.
FIGI establishes financial-inclusion principles of common relevance to all countries. But it also encourages us to learn from experience – only by sharing experiences will we clarify the practical implications of adherence to these principles and how these implications differ from country to country.
FIGI consists of two complementary work streams, an operational work stream and a knowledge work stream.
FIGI’s operational work stream provides technical assistance to developing countries in their efforts to create policy environments able to stimulate financial inclusion.
FIGI’s knowledge work stream is led by three working groups looking at three key dimensions of financial inclusion.
These groups are studying how we might create incentive for electronic payment to become the norm for very low-value transactions.
They are researching the potential of digital ID systems to grant citizens access to formal systems of all kinds. And they are proposing security mechanisms to give users the confidence to trust that their money is safe.
This week’s FIGI Security Clinic is organized by FIGI’s Working Group on ‘Security, Infrastructure and Trust’. This working group is led by ITU.
The group has investigated Fintech security challenges ranging from SS7 and USSD vulnerabilities to customer authentication, the security of blockchain and distributed ledger technologies, and the impact of Big Data analytics and Artificial Intelligence on data privacy and consumer protection.
The entire FIGI community can be very proud to be part of this important work.
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