G20 Proposes Nine Principles for Innovative Financial Inclusion

> Posted by Anita Gardeva
Earlier this week the G20 Financial Inclusion Experts Group (FIEG) announced the endorsement of nine “Principles of Innovative Financial Inclusion’” which were created by the Access Through Innovation Sub-Group of FIEG.  These principles, which build on the experience of policymakers throughout the world, will create the foundation for an upcoming strategy towards financial inclusion that is based on the “safe and sound spread of new approaches” and which aims to encourage an enabling environment for innovation while also protection the client and financial systems.
The Nine Principles of Innovative Financial Inclusion are:

  1. Leadership: Cultivate a broad-based government commitment to financial inclusion to help alleviate poverty.
  2. Diversity: Implement policy approaches that promote competition and provide market-based incentives for delivery of sustainable financial access and usage of a broad range of affordable services (savings, credit, payments and transfers, insurance) as well as a diversity of service providers.
  3. Innovation: Promote technological and institutional innovation as a means to expand financial system access and usage, including by addressing infrastructure weaknesses.
  4. Protection: Encourage a comprehensive approach to consumer protection that recognises the roles of government, providers and consumers.
  5. Empowerment: Develop financial literacy and financial capability.
  6. Cooperation: Create an institutional environment with clear lines of accountability and co-ordination within government; and also encourage partnerships and direct consultation across government, business and other stakeholders.
  7. Knowledge: Utilize improved data to make evidence based policy, measure progress, and consider an incremental “test and learn” approach acceptable to both regulator and service provider.
  8. Proportionality: Build a policy and regulatory framework that is proportionate with the risks and benefits involved in such innovative products and services and is based on an understanding of the gaps and barriers in existing regulation.
  9. Framework: Consider the following in the regulatory framework, reflecting international standards, national circumstances and support for a competitive landscape: an appropriate, flexible, risk-based Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime; conditions for the use of agents as a customer interface; a clear regulatory regime for electronically stored value; and market-based incentives to achieve the long-term goal of broad interoperability and interconnection.

To learn more about these principles visit the G20 Summit page or download entire paper, “Innovative Financial Inclusion
For more information, sign up for updates from the Financial Inclusion 2020 campaign.

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