Financial Inclusion in the Digital Age
Key issues and policy suggestions for promoting financial inclusion are discussed in this new policy brief.
Financial systems have been expanding, offering more services for savings, credit, investment, insurance, and retirement. However, much remains to be done to provide quality services at low cost to people and small businesses in both urban and rural areas as well as in poorer regions where there are fewer profitable opportunities. The development of information and communication technology applied to financial services provides new opportunities to increase financial inclusion but also requires greater financial awareness and literacy. As the finance sector reaches new consumers who are inexperienced with financial services, consumers need to be fully informed of the costs and risks of the financial products on offer. Meanwhile, traditional commercial and retail banks are finding that digitized finance is disrupting their usual approaches to handling savings and lending; they need to adapt and find ways to provide electronic services to meet the growing demands of their customers.
The policies needed to promote financial inclusion in the digital age were discussed at an international conference held at the Asian Development Bank Institute. The event took place on 7–8 April 2016 and was attended by approximately 100 high-level government officials and banking sector employees. Key issues and policy suggestions arising from the conference are discussed in the Policy Brief, “Financial Inclusion in the Digital Age.”
- Strengthen credit information systems to facilitate delivery of financial services to new customers.
- Develop new microinsurance services to reach the poor.
- Strengthen risk-based monitoring of crossborder transactions to protect remittancedependent households and communities.
- Reform financial regulation to promote savings through formal channels.
- Develop financial infrastructure to extend financial services to small businesses.
- Improve financial education and financial literacy to ensure financial inclusion.
- Evolve and adapt financial regulation to suit digital finance.