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In addition, it is hard in the circumstances to be an entrepreneur when you are outside the foremost Financial System. It is difficult to gain access to capital or form a business when you lack basic Financial Services but the good news is that many nations have made commitments to expanding Financial Service services for the poor and they understand that it is vital to Economic Development and social inclusion. As a result, they are developing Financial Inclusion policies and implementing a new framework that encourages inclusion. Today, robin lewis, john and myself are wanting our third annual Brookings Square card metering progress on Financial Access and usage with the support of the bill we have embarked on a threeyear study of inclusion in 26 developing countries. The short summary is that weve seen progress on Financial Services in many places and there are efforts to help marginalized populations and this is happening through mobile money and digital Financial Services. As part of our research we got detailed suggestions from every country and we also talked with many leaders in the Ngo Community who are for Financial Inclusion and were grateful for their support and help along the way. To give you a more detailed sense of the highlights of our study my colleague robin will summarize the key findings and robin is a Research Analyst in a social fellow at brookings with our center for technology innovation. With that, i turn it over to robin. Good morning. Thank you to darrell for those remarks. Our sincere thanks to all of you for joining us this morning either here by lifestream or africans. We are grateful for your interest in the project and im looking forward to providing a brief overview of our approach and key findings for return it over to the panel discussion. First, id like to start with a brief overview of our project. As mentioned, the financial and Digital Inclusion project was launched in the summer of 2014. The purpose of the project was to provide policymakers, privatesector representatives, nongovernmental organizations and the general public with information that can help improve Financial Inclusion and around the world. Why does Financial Inclusion matter . At the individual level Financial Inclusion matters because it provides pathways for people to improve their Financial Health which contribute to their overall wellbeing. Beyond that is a key ingredient in advancing Sustainable Public goals such as Poverty Reduction and gender equality. To support our overall objective over the past three years we have selected a series of politically economically and geographically diverse countries and we have evaluated their progress toward Financial Inclusion through a series of annual reports, as well as conversations with diverse groups of experts. So lets talk briefly about the report that we are launching today. This is the third annual report and as with the first reports we examined access to and usage of formal Financial Services across a diverse country contact. When i say formal Financial Services we primarily focus on basic services, since either the formal system including a savings account, government two person transfers. The 2017 report we have distilled and updated the Country Profiles that we featured in 2015 and 2016. In addition to these selected Financial Inclusion highlights, and updates, we have included some recommendations regarding key next steps for advancing Financial Inclusion. Given the scope of our sample and the rapidly evolving nature of the inclusion around the world these lists are not exhaustive but we do believe they capture an important snapshot of Key Development and opportunity for future growth. So, moving to a quick scorecard interview. As darrell mentioned the components of our report informed by a research on each countrys landscape is a scorecard tool. To develop the scorecard we identified four dimensions of Financial Inclusion including country commitments, mobile capacity, Regulatory Environments and the adoption of formal Financial Services. In terms of our countries sample we maintain the same risk as in the Previous Year in which we added five new countries to diversify our sample. These countries included the Dominican Republic and, egypt, el salvador, haiti and vietnam. We will dive into the dimension level findings very shortly but for the moment here is a preview of the 2017 scorecard. As you can see the top scoring countries are generally distributed across latin america and Subsaharan Africa. Although, countries and other regions including the philippines also demonstrated strong performances as well. For the third euro can you receive the top place on her scorecard, in part due to the robust commitment to advancing Financial Inclusion as well as Widespread Adoption of mobile Money Services. With that said, a number of other topranked countries including several in latin america have experienced lower levels of mobile Money Adoption to date but often have robust takeup of innovative card based services, as well as nontraditional access point such as banking correspondence. We think this finding should be encouraging to the Financial Inclusion community because it demonstrates that countries with different political, economic, and geographic environments can effectively pursue different pathways for advancing inclusion. So, to provide a better sense of what factors inform the scores we will briefly walk through some of the indicators across the four dimensions before we explore our findings. For example, country commitment indicators include these assistance of comprehensive, National Inclusion strategies as well as the specific Financial Inclusion framework for the Consumer Protection framework. These indicators help give us the sense of whether countries are willing to work collaboratively across inspectors to make engagement to just make engagement with Financial Services a priority. Moving to mobile capacity. We measured this because it includes indicators related to mobile infrastructure, as well as the number and type of mobile Money Services that are offered. Now, while Digital Financial extend far beyond mobile money these offerings can provide a very convenient, affordable platform for those who are typically underserved to access Financial Services. Moving briefly to Regulatory Environment. We look at whether regulation, policies or other guidance concerning electronic money and other forms of digital Financial Services have been issued. We also looked at issues such as mobile money platform interoperability which basically means whether customers of one service can easily send payment to customers of another mobile money service. Finally, moving to the adoption indicators we focused on account adoption with both more traditional Financial Service providers as well as mobile money providers across underserved groups in particular. These groups may include lower income adults as well as women. All the data in this set is from the World Bank Global index database and we look forward to updating the data as a new data set is revealed. Moving to the key findings. First, lets begin with the country commitment to mention and touch on a few examples of country progress. For example, mexico increased its overall score by five Percentage Points this year to join the top five scoring countries. A couple of the changes that prompted this increase include that in june of 2017 the National Council on Financial Inclusion released the national Financial Inclusion plan. The government of mexico also joined the United Nations based better than cash alliance. Moving to mobile capacity, el salvador is a example of a country that increased its core by five Percentage Points over the last year partly by increasing adoption of smart phones which can provide a more convenient and accessible way for individuals to access mobile Financial Services. Moving to Regulatory Environment, countries from across all of our major region had strong performances on this component of the scorecard including peru, the philippines, rwanda, in india, which all receive the highest score possible under the Regulatory Environment dimension. For example, in addition to promoting mobile money interoperability, india has licensed several entities at payment banks which effectively increased Access Points for underserved individuals. Next, listening to adoption findings. The data and metrics on the adoption of traditional and digital Financial Services are consistent from last year and among the countries that were added in 2016 and one example is the Dominican Republic which received the highest adoption for among those countries. Now, lets turn to some of the key findings and call to action in this years report. Across our countries, one encouraging finding is that there has been considerable growth in recognition in final inclusion is not only important for individual welfare but it can also contribute to macroeconomic growth and Sustainable Development goals including the one i mentioned previously. The one Interesting Data point on this front is that out of this year all of the countries in our sample our members of Financial Inclusion oriented groups or networks and while membership in these groups is important and valuable we also need concrete steps to emerge from their engagement. This is where infrastructure investment, and the regulatory component of this scorecard come into play. In addition we also need consistent, detailed data to track progress toward these goals. One example is a portal that enables countries to do that is the alliance for Financial Inclusion new data portal which is a helpful platform and we hope that more countries will take the opportunity to include timely detailed data that is available for public consumption in order to help with knowledge sharing and accountability. Moving to our next key finding. Syntax which is intact the intersection of finance and technology provide tremendous opportunity to accelerate progress toward Financial Inclusion. Basically contact includes our innovative use of technologies to both design and deliver Financial Services on product and if that sounds like a broad catchall term, thats because it is. This can help enhance the accessibility and the utility of Financial Services for consumers and render the deployment of these services more costeffective for providers. For example, in a july 2017 report by the institute of National Finance in the center for Financial Inclusion Spanish Banks is working with the chilean fintec to extend Credit Access to individuals who may not have a typical Credit History that they have established. We are excited about these kinds of developments because they not only enable customer asks us Financial Services but they can also help it become more accessible for individuals to use the services. How are some countries taking fintec into account but one example is in indonesia where as august 2016 the Financial Services authority provided an outline of guidelines for the local fintec industry. Additionally, in south africa, this is increasingly prevalent and the Regulatory Framework is expected to form part of the context of Financial Institution built in 2017. Finally, we encourage countries to amplify an investment in Cyber Security efforts and knowledge sharing in order to fully reap the benefits of Financial Services innovation. With the proliferation of Digital Technologies boundaries are blurring across traditional Service Providers as well as Tech Startups and other groups. While many of these fintec companies are nimble and costeffective they may also not have the resources, the infrastructure or the experience to ensure that the services they help provide our safe and secure. With that said, of course, banks are also not exempt from this, particularly when they have outdated or centralized systems. In a conversation with many stakeholders that we had in february of this year, one suggestion that emerged with some policymakers as well as Financial Service providers to work with technical experts to essentially provide a set of menu options to enhance Cyber Security and to provide Technical Assistance for implementing those solutions. Moving forward, we look forward to hearing from all of you regarding this years report and scorecard, as well as the 2015 and 2016 report. We will continue our efforts to facilitate dialogue regarding important Financial Inclusion development and the outcome of the scorecard. We have an address set up here at brookings. Edu where we welcome your feedback. Now, thank you for listening to the presentation and i would like to invite our moderator john as well as our distinguished panelists to the stage to share their perspective on Financial Inclusion. Carmac[applause] you very much to robin and darrell for putting us on the stage here and thanks you for taking time out of your schedule to help us with the dialogue on this important topic. The organization for the remaining portion of the program is i will introduce our panelists and i will ask a series of questions and we will hear their perspective until approximately 11 00 oclock and then we will open it up to questions that you may have aimed in those might end at 11 30. Ill briefly introduce our palace pretty mainly to my left is camille. She is director of the brookings race prosperity and Inclusion Initiative in a senior fellow and government studies and she also has appointment here at brookings in the economic studies and metropolitan policy program. Camille has dedicated her career to expanding financial opportunities for low income populations. She came to brookings from the gap, the group that is the support she served as the organizations lead financials sector specials. Previously worked for the Consumer Financial Protection Bureau, Us Government financial regulator where she served as the agencies head of the office of financial indication. To her left we have diego, he is an International Consultant in the area of Digital Transformation in government. He was minister of information and Communication Technology to the acronym ict of columbia from 20102015. During his tenure, columbia expanded all of the elements of the visual ecosystem, not only in production but services, applications and users. Internet coverage extended to low income homes in rural areas, 4g lte, fiber optics and highspeed networks and even those in the middle of the amazon. With more than 100 community have. [inaudible] we are privileged to have these two panelists with us and i will start off with an initial question that i was directed to camille and ill have a question for you, diego, and follow with more. Camille, as mentioned a moment ago you are the director of the race, prosperity and Inclusion Initiative here at brookings. Could you briefly describe white Financial Inclusion in matters for traditionally marginalized communities and communities of color . Im happy to be here discussing Financial Inclusion, not only globally but certainly domestically. I think a lot of people are unaware of the fact that here in the us we have 10 Million People who are on the banks and another 25 million who are under banked meaning that they really dont have access to the full fleet of Financial Services and products. What that means here is a couple of things. Just generally, not having access to Financial Services makes it very difficult to save money, obviously, and to be prepared for emergencies but also makes it very difficult to start investing in creating a foundation for wealth creation. When we dont have that, particularly in the United States where leverage is really important to Building Wealth and particularly to transferring inter generational wealth, then not having these services and not been included in the formal Financial System makes it difficult to make strides. You see that here in the us because a lot of the people who are not formally banks tend to be people of color or communities of color. In the us we have a very large racial income gap, as well as wealth gap. Some of that is attributed to the fact that we simply do not include a lot of africanamericans, latinos and others in the formal Financial System. To give you a sense of that, in the us for the median accumulated by white households is a hundred 11000 and for africanamerican households its 7000. That gives you an idea of the disparity and why it is so important to have folks included in the Financial System. Thanks so much. Daigle, given your expertise and experience in ict can you share some ways that you have seen Digital Technology transform the Financial Services sector in colombia . Thank you for the invite. As camille said, we have many, many challenges in Financial Inclusion everywhere in the world and one of the main ones is infrastructure. How do you get with thanks to everyone . Technology, that is the solution. That is what happening and most of you have the example in africa where many operators in the world are moving in the direction but having access to technology is not enough. We are putting that in most countries. For example, in latin america just around 50 of people are internet users, although more than 85 of people are already covered by networks by broadband networks. Why . Because there is no applications for them. When you asked them why dont we use the internet the answer is useless for me. It doesnt change my life. Basically, we have to work, not only in putting infrastructure, but in developing more solutions to change their lives. That is part of what the Financial Sector is doing. The fight Financial Sector starting to use this technology, initially for mobile payments, and some Financial Services. But not only that the future of that is huge. In digital there is a huge initiative and we are working on that as well to how do you make sure that people have an id. If you see today the Financial Sector is the one that has the power to make the id platforms for everybody. Secondly, most of the credit given in the whole world is based on the one now the financial power to move up to digital and help people to get credit easier instead of going to traditional paper, state based own registries this can move to and transform completely the way credit is given today. Thank you very much for both of your interesting perspective there. Next question relates to the United States and as robin mentioned, this is the third year in which we been doing this and our project is specifically looking at a set of countries that robin alluded to a few moments ago but as camille reminded us theres a very significant challenge in the United States depending on how you measure some number of tens of millions of people are either excluded from or at the margins of the Financial System. So, it is a reasonable question to ask what can we learn . My question is what can we learn now that we have this incredibly rich tapestry of solutions that are being explored around the world and this global effort to improve the ecosystem, how can we perhaps bring some of the Lessons Learned and apply them to inclusion here in the United States . I will start with camille but perhaps, diego, your thoughts as well. Id be interested in hearing your answer to the question, diego. At least, for my perspective there are three areas where we can learn from the rest of the world. The first in the regulatory arena, i think, what is really interesting about the us Financial Services regulation is it tends to be very sectoral. You have communications relations, fcc, different types of financial regulators at the federal level, as well as at the state level. You have a lot of plural regulation and its quite what is interesting and what is involved in some jurisdictions that weve been looking at in this report is that you see a melding of that and you see some of a little more of the flexible regulatory approach and that is important. Particularly as technology evolves, it is important to have coordination, at least coordination with the range of regulatory authorities, telecommunications as well as banking et cetera. Here we can learn from the lessons i think we can learn. Second, as diego mentioned, this interesting area overlap between generating digital identification and account opening which india, of course, has done really well. Particularly for people who are under banked and significant documentation problem, digital ideas would be really useful and i think that combination of the digital identification as well as providing more opportunities for simple basic account that is also something that we can learn from other places. Finally, i think was a lot of the experiences have shown both here in Subsaharan Africa and as well as south asia is that there is a market for people who are doing very small, frequent transactions and, i think, we need here in the us to revisit how it is we encourage innovation around that and how we regulate around that, small but frequent transactions. Thank you. Any thoughts for how the United States can improve our inclusion, diego . Im not an expert in the United States but that doesnt prevent me from answering. [laughter] you know, this is very easy. You guys in the us have to see what is happening around the world and copy and paste. Copy and paste. For example, let fintec grow in the areas of the United States and it is growing in many, many countries in latin america and copy the fintec buildup and congress or in two weeks in mexico and lets try to see how that Regulatory Framework can be implemented in the us to tackle people in the pyramid. The Financial Sector in the us and everywhere in the world is in there happy with high margins and very few banks in the world are concerned about people in the pyramid. Very few banks in the world are really developing new business with lower margins. So, if they dont go, let no ultra new people go to that market. Adjust your Regulatory Framework as we are doing in the developing world. Thank you very much for your comment. Another question. This is primarily for diego as it relates to specifically to columbia as everyone in the room knows theres been a recent court in columbia and in a decades long conflict involving fark and theres optimism in the future of columbia now that that has been concluded. My question is what do you think the impact of that will be in the inclusion landscape given this very recent Historical Context but recent development . Look, i think it will be a different country. We will move to a different level. After 16 years of war we spent most of the budget in defense and most of the colombian budget was in defense until this year. For the first time in history the location is the largest budget. Why . We dont have to spend it in defense because we have a peace agreement. Secondly, many areas, most of the country, was in the middle of a conflict so developing business in those areas was very, very hard. Now we have the opportunity to develop business in those areas. Thirdly, the colombian has had a policy on how to encourage the growth of Financial Services everywhere. In 2010, when we drafted the policies on how to reduce poverty in columbia we joined forces between the itp ministry and the finance ministry and we said lets first of all deploy infrastructure everywhere in the country. Today, columbia is the best connected country in the region. We have fiberoptics in almost one 100 of communities and we have broadband everywhere, even in the middle of the jungle. That has to be part of the day by day life of people in those areas. Also, the government said we have to encourage demands. This is not only about the supply side of it but we have to encourage demand. All the subsidies that the communist gave to poor people that includes the subsidies for the former victims of the conflict and they are given through this new technologies and through this Financial Services and also in order to. [inaudible] the government also changed the regulation so new companies are now part of the game and the whole country with this thing is that it will change dramatically in the coming years. Thank you very much. Heres a question for both. What do you think the greatest challenges are that the Financial Inclusion Community Faces in seeking to contribute to the Sustainable Development goals such as Poverty Reduction and gender parity . That is a huge question and you could write a thesis on either one of those but see what we can talk about in a few minutes. What are the greatest challenges . Theres been all this effort over the last five or ten years but obviously were a long way from having enough Poverty Reduction and were certainly nowhere near gender parity. I will take a crack at it. Im sure there are about 15 things that we could think of but let me just mention three. The first is i do think gender parity is continuing to be a very transition problem and there are many reasons for that but when we look at Financial Inclusion, in general, women and to not to do very well. Even in countries where there are large advances there will be exceptions to that, can you being one of them but if you look at south asia, for instance, very, very difficult for Financial Inclusion for women there. The second thing is i actually think thats one of the challenges of Financial Inclusion is to figure out both, at the country level, but certainly at the community of blimp rest as well is how is that we link Financial Inclusion to economic participation into social inclusion and what are all the steps from getting included in the formal Financial System to getting into the formal, you know, employment system to then moving and getting some social movement and social mobility. Those kinds of steps arent well mapped out and you can stall at several different notes. Thats a real problem. The last thing is for the ultra poor, i still dont think Financial Inclusion is as relevant as getting people stabilized to the point where they can then take advantage of Financial Services and i think we still havent really cracked how to do that kind of Economic Stabilization and at a mass level and i know theres a lot of experiments. When i was at the gap we worked on graduation which is an approach to Economic Stabilization. Needs to be a much larger scale to crack that. I think the main challenge is trust. Especially with Financial Services. How you make these people that havent had access to any Financial Services to trust. We all do it here but how you break that barrier in create trust. Whether it is saving money or committing to pay interest on a loan or whatever. Thats the main challenge for me to reduce poverty. How we create trust between consumers and how the Financial Providers in these new Financial Providers and secondly, how we create trust between those new players and the regulators. Thats a tricky balance. We have to adjust the regulation but we have to have the right balance and in countries like colombia, again, having a huge non profit problem laundering money is a key issue. We have to create trust, as well between the new players or the new services and government. Traditional banks, you know what we have found in many countries, is that the regulation is too heavy for banks to go to the base of the pyramid. Also, not only having a new regulation for the new players but a subsequent relationship for the old ones. I will take the liberty of briefly stepping outside of might moderator role and i cant help but mention when we talk about trust that thats another reason why Cyber Security is such a foundational part of the equation and one which, at least in my view, has not gotten nearly the attention that it needs in this context. A lot of people talk about it but i think at ground level there isnt a nearly enough Cyber Security. If youre new to the Financial System in your first or one of your first experiences with it is losing your money because the new solution you tried got hacked then obviously that is exactly the opposite of what we want to happen to build trust and these new services from the perspective of the people who are adopting them. Trust is a really important issue. So, let me ask a question for camille, specifically your experience at the Consumer Financial Protection Bureau and given that you have any thoughts on how to advance Consumer Protection and privacy in this increasingly digitized environment through the lens or the context of Financial Inclusion. In other words, as we deliver the services but to do so in a manner that provides the requisite levels of protection, globally even though your personal work happen to be in the United States . Before i answer that, let me say the future the bureau is the newest regulator in the us created in 2011. Its as a result of the financial crisis. It really governed market conduct in the Financial Services arena. When i think about Consumer Privacy and Consumer Protection, more generally for people who are at the base of the pyramid, i do, of course, think about trust but i also think that the kinds of people who are just now getting into the Financial System for the first time our people who arent used to the marketing tricks, ill put it that way or the ways in which their data may be used et cetera. Theyre just not really aware of the many ways in which a Financial Institution can make use of their data and can also put them in fairly precarious position if something goes wro wrong. Like you wrote loan is repaid et cetera. From a purely at the privacy level its important to explain to people what it is they are getting into and there many creative ways of doing that using visuals. Thats important and important for regulators to be at the forefront of encouraging providers to provide that kind of education. I think the second thing is that privacy standards can really vary, country to country and they can vary depending on the sector of the Financial Services provider so might be different if you are in telecom or if youre in baking and different again if youre in for nine. There has to be some way of harmonizing that and springing those up to global standards. Its important for regulators to conduct meetings where they are not only talking to providers but talking to consumer advocacy groups and theyre also talking to other regulators about how you do that kind of coordination and particularly Subsaharan Africa and its very important for a regional approach for that because theres a lot of people movements for jobs and Economic Opportunity and its important to have a harmonized approach within specters in a jurisdiction but across regions, as well. Thank you very much. I have a question for diego here. As a reminder, for the audience, we measured Financial Inclusion with respect to the four key dimensions which were country, commitment, mobile capacity, Regulatory Environment and actual adoption of these services. Columbia received a perfect score on the country commitment access of those for axes in relation to Financial Inclusion. Id be interested to know what are one or two of the things that colombia did to demonstrate their commitment to advancing inclusion. Policy. The policy is to include everyone. Secondly, employing the tools and technologies so that people can have access. Columbias number one in affordability and this is not just deployment but making it affordable to people. The publicprivate partnerships and thats very important. We went to the Financial Sector and the traditional one and said look, we have to go to the base of the pyramid and what you need. Some regulatory adjustments both concerned telecom that we needed and for example, out of that just one. [inaudible] they made the mobile payment proud and it is one of the largest mobile payment platforms in the world. More than 4 Million People that didnt have a bank account now have it through the mobile phone. They dont have to go anywhere to any bank to open an account because they can do it on their phone and they can pay ecommerce sections and they can do a lot of things and there are thousands of thousands of cash in, cash out points and traditional banking also played an important role. Also, other ppps with the telecom sector, for example, companies that have these business of charging the mobile phones with money like the prepaid cards moved thanks to the new regulation. The traditional Payment Services increased dramatically but to increase the demand of Payment Services we also needed a new way to increase ecommerce policy. Columbia is doing fine in terms of, not the traditional amazon but the relative of columbia theres a company called. [inaudible] and columbia people are very lazy and people dont go to the supermarket and theres a bunch of mom and pop shops. How do you reconnect those mom and pop shops with the consumer through this app. Today its one of the largest services in columbia and that helps bring assistance and again, the government distributes through those payments that is a part of the district of columbia. This is a question for both or either. What factors of course, we all know the various factors that can impact and help promote Financial Inclusion and one way to look at it is the organic view which is the technology alone coupled with people doing innovations will take care of it and government arent as important as some might suggest because so much of it happened organically but another viewpoint would be on the opposite end of the spectrum that government is an essential player and need to be the central players on Financial Inclusion and of course the solution will follow. Id be interested in your perspectives on the relative importance of leadership, just simply letting the technology do its thing and publicprivate partnerships. What are the factors that are most fundamentally important or are there factors that are overplayed in underappreciated in promoting Financial Inclusion . For me, the main factor for not only financial industry but for the whole economy is talent. We lack four types of talent. The first one is the engineers so, that is a problem even in the us. We dont produce enough engineers and we dont produce enough engineers that develop new applications for the new Financial Sector. The second type of talent that we lack is women in the industry. This is not about gender equality. This is about productivity. If women dont work, we are not going to be able to grow the economy. I think in most countries government subsidies focus on women and weve seen the positive result on that. Empowering women to control the finance of homes has been very successful. Also, we have to help them truly moved to jobs everywhere. The third type we need is that we have to change the communication system. Today an account en bloc chain is worthless. There are some accountants that might disagree. For all of you accountants out there who dont understand blocking. You have to go get trained on that. That is key. If the doctor doesnt understand what big data is they are not going to be able to work on new medicine or we have to look at the way we look at profession has to be a type of computer engineer. The fourth type we need is the leaders. We need leaders that understand this new economy and how to turn the colombian business into the economic business. Thank you. Camille, any thoughts . In addition to what diego mentioned i actually think that having spent a couple of years at working on Financial Inclusion for a while we think intentional government policy is a really big factor. Ive come to embrace that and i think that its very important. I do think, also, coupled with that you have to have an environment that encourages and stimulates innovation and that means you have to have a Regulatory Environment that also is enabling of innovation but also providing guideposts and guide rails how the Financial System can evolve to meet the needs of the base of the pyram pyramid, poor people. In addition, when we talk about Financial Inclusion we mostly talk about expanding access to Financial Services but i want to put a plugin into responsible Financial Services and the addition to the other areas i listed we do need to have the basic Consumer Protection framework. I may be telling people what they already know but a quick reminder that block chain is the technology that does things like that going and its merely one of many applications. Another term you may have heard is distributed leg or technology the idea that you can take a large number of computers which is trusted but paradoxically creates a format a network which in the aggregate behavior trust in matter. Its a Fascinating Technology which has implications certainly in the Financial Sector but also with many other applications, as well. I want to make sure we are all on the same page. This is a good time to do one wrapup question and ill open it up to the audiences. This is a feature forwardlooking question. Are you optimistic after looking at what happens over the last fiveten years and using proliferation and numerical progress are you optimistic that we will continue to see Good Progress and plateau or fall back to what is your candid view of the next five years in inclusion . Im very optimistic. Im optimistic because we have the tools which is basically around technology and we have young people. The trust is here and they are innovative and im very optimistic that Financial Services are going to be going to become a factor of. There are some risks. Cyber security is one of them and the second risk is how to manage Consumer Protection because the breach protection or privacy could damage the trust. I am cautiously optimistic, maybe im less optimistic than jacob. Im optimistic the services will grow in the number of people will grow but it will increase dramatically but the caution is around a couple of things. The first is that i still think it will be very hard for extremely poor people to get into the Financial Services dont and i just dont think we are correct that. I think it will also be hard for women, for women in particular. For them to be included and im not aware of any big gains and im also cautiously optimistic because i think, as you grow these services, theres potential for scandal. Theres a lot of growth of digitally offered credits, services and that offer opportunities for scams and all kinds of consumer abuses. The Credit Bureaus operate a little differently and that might be opaque to consumers. It also offers opportunity for things to go badly for them and finally the advent of using social networking data to make credit decisions is a little creepy and i think it needs some guardrails if we are to use that as a way of including more people in the formal Financial System. Thank you very much. We will open it up to any questions that you may have. We have some microphones available so in terms of if you have a question, please raise your hand and my one request is that you briefly state your name and what organization you are with in my other request would be to please ask a question. That would and to do it rapidly enough that we have time to answer the question. Gentlemen of the and anyone else, raise your hand and we will get to you. No one that going. An advantage or digits manage to this whole concept to inclusion and it seems that america in the states is acting at cross purposes. The media is under siege right now and i think its been a wonderful Consumer Protection agency it has not gone away so how can you get more people and plus, the fact that banks have not been honest brokers for a long time. There is that trust issue that diego talks about. If you can address those couple of things. I might talk about that going to. That is distinct from Block Chain Technology and the latter have potential to be interesting in the Financial Inclusion space particularly as it diego mentioned. When you are talking about using property as a way of evaluating who you are et cetera. I actually think that there is a lot of potential with block chain and vote Ledger Technology that could be useful to property claims and all kinds of claims and also validating who has done what with money. Also making it easier and a lot less, gated to move money from point a to point b. Theres opportunity there. On the cfpb, cfpb has been a political for a long time and the folks who work there are used to that and it does seem like the political terrain right now is pretty complicated. It is not entirely clear to me that given the list of priorities that the Current Administration wants to work on that the cfpb would be at the top of that list. I think, in terms of Digital Currency, very, very positive. Bitcoin, i am not sure. I think Central Banks have to learn how to operate and regulate Digital Currencies dramatically. It will have to improve the efficiency of the whole operational money in the countries. They have to work on a key of governance for those Digital Currencies and thats the problem with bitcoin. If you go to a central bank in mexico or brazil and you talk to them about the Digital Currencies and you talk to them about bitcoin they would say no because they dont have control of that. Creating that governance will be completed but to create government to that you need talent and you need the whole Financial Community to understand that so you have to go back to my point of talent. People do not understand what block chain is then no one will support any initiative of moving to Digital Currencies or very few people. In order to create the trust we need people to understand the power of this new technology in the security and implications. Also, the regulation. We are moving from regulation to dynamic regulation and that will be based on algorithms. Today was a simple revolution in every part of the industry. The new economy is based on algorithms. The regulation will be based on algorithms as well. But how come the us regulator will order and out rhythm if you dont know what it is. We have to still work very hard on. [inaudible] if i could add, let me talk about a clarification. A Digital Currency is, of course, you could contrast out with paper but a Digital Currency is a class that could include a crypto currency like bitcoin but it is also possible to have Digital Currency that is not distributed. Digital doesnt automatically mean it has to be bitcoin. It is certainly true that bitcoin is a particular class of Digital Currency often called a crypto currency where the management is distributed in a manner and i think of them differently in the sense that the governance issue relating to centralized Digital Currencies, in other words an entity like the government could issue its own currency and do it in a centralized way but yet through digital, that is different from a government standpoint then a truly distributed currency like bitcoin. The other thing i will say about bitcoin is i am a big believer in potential block chain but i also sometimes see a potential overplayed. I dont think that block chain is the solution to all problems. There are use cases where the great solution and frankly, there are some where its not the right solution even though there isthat suggest that it is. With that, there is a woman in the back who had her hand up. We will go to her and after tha hello. I work with the micro in part of that is using those Financial Services. The Financial System services are basically Payment Systems and dont move the needle. You have to create a whole ecosystem of applications where they just played the role of moving the money, but theres going to be other values. Access versus you chose usage . No, i agree. Thats really been an issue. You can have a lot of access and wish on increasing access. Typically the numbers are about one third of the people who are actually signed up use accounts and so theres a pretty big drop off. That means that for whatever reason they are not finding value in as david said, its about building value. Part of building value is really understanding what these customers need in these customers are going to be very different from customers and higher segment and typically the way Financial Services react in new customer segments as they take an existing set of products in the up and down market without actually doing the research that allows you to know what their needs are and how you meet disneys appropriately peer i will just add that the good news is we sort of wise. Six or seven or eight years ago you wouldve found some people focus overly on the number of counts created as a metric. I think very few people in the Community Today would use that number long as any sort of a global success metric. We also look at, for example, if youve done at least a certain number of reactions per month, then it sort of count more than if you have an account that you never use. It is a core question to mr. Thank you very much. The gentleman appeared that will go to the right and into the back. Sir, to your right. Thank you. Her shipment from a on legal and Regulatory Reform for isi. Another core question spiriting diego suggested highmargin were access to finance. Hasnt the experience been the melody ngos in particular with what would the high rates of interest for advanced countries make access to finance possible. Talking about 2. 5, 3 a month interest and not get funders to fund microfinance. What i says the situation was very happy with highmargin. That doesnt mean [inaudible] of course. You know, you choose the business you want to be in. Like what we are seeing when Financial Inclusion is growing in places where the companies are going, either entrepreneurs for Telecom Operators or banks. Say lets straddled this new market. I talked about wdm. Lets innovate. I think that combination of newcomers is very important because the nonregulation and to really build together. Like in brazil or w. Admin columbia, they are really working on creating alliances to tackle the base and be successful. No, i would agree that in a couple of different ways, with diego, first of all i do think that at this globally it is very difficult for banks to go down market and really service those people in a way that makes sense for them from ipn all this. Pm now perspective. Unless they are able to engage or bring the cost of service down into doing a lot of little transactions. If its not digital, theres a lot of handholding. So that makes it expensive. Particularly, if you are not going to tweet your product to really work for poor people, then its going to seem the cost will seem extremely highly. I think where there have been innovations, kenya equity bank, for instance has tried to put together a Digital Mobile money product and now what theyre doing, which is an interesting experiment is they are getting rid of atms and kind of forcing people to use the mobile money product. That will be interesting to see exactly how that works. They are trying to drive demand and actually created a product for poor people. Itll be interesting to see how that works out, but you do have to create those products for poor people in order to figure out how you will work the margins and then you also have to figure out how you are going to Leverage Technology partners to drive down costs. Im with you 100 on that. The gentleman in the same row. My name is adam. I used to be head of policy word macs come in india. Just a couple of comments. We have found we need to distinguish between Financial Inclusion in inclusive finance. Sometimes the services are not only doing anything, it can actually be humble. This is where one comes in to back of the some of the fundamental and even issues like trust. A lot of people in countries such as india and all over developing countries trust banks and financial middlemen less. Our feeling that they dont trust the mobile force you know, its the other way around. It comes back to what you just said. This is that coming you know, existing Financial Institutions are not geared to not interested generally to make the change. Only when the new people or whatever group that weve got atms in others. We can talk later. My question to you as to what extend is the digital at density a critical factor in financial intrusion with 1 billion people with biometric geared people are worried, et cetera. On the other hand, should everybody have a Social Security number . To what extent is that an improving exclusive finance or not. Do you want to answer . I think it is a strength. I actually do. In many, many countries from the people are very mobile. They dont have fixed addresses. They dont have identity papers. All of the things typically required by banks to satisfy your customer rules, et cetera. It becomes a real barrier. So i think its extremely significant and i cant stress that enough. You know, i do think it is important to innovate in ways that allow people who have the characteristics and profile basically which is they are transient and dont have documentation to be able to signup for Bank Accounts another kind of financial accounts. Is one of the main opportunities to refinance inclusion. It is the way to track a persons life. You know, to understand what they do. Not only a person, and i said, which is critical. Most of the asset [inaudible] thats a sort of opportunity. You belong to a premium to buy a motorcycle for a car, you know, having detailed tracker that is also important to increase the product to the viewer the Financial Sector. I think it is critical and there are different ways to really grow. One is what india is doing, which is an Initiative Led by the governor. A traditional Initiative Led by the government. I think one way to do it is to refinance the sector. We train the government in the Financial Sector to create a common platform. I cant help but respond when he used phrases like it can easily track peoples life. There is some people who would not necessarily celebrate. And so its just a doubleedged sword. You can imagine very reasonable fears not wanting to be in a system like that if the information could be misused. I think where the question in the back. Over here. I think we had david here. Hi, david magee intimacy gap. One of the areas where Digital Finance is not really achieved its potential as consumer to merchant payments. Payments may be made to the consumer from the government digitally to get customers in receiving digital payments, but then they go to an atm and cash out and go to the merchant. That seems like an undue friction and costs of handling cash, but yet somehow there hasnt been Merchant Acceptance or customer demand to make electronic payments. You see that its an issue in Financial Inclusion and if so, what can be done about that . Go ahead. Im going to say i think its an issue ensuring that access to finance growth in terms of the number of services utilized. I do think there are a couple of different points. The first is that you need to have an ecosystem of merchants who are willing to obviously use the system and in order to do that, you typically have to have a platform, transactional platform that people can plug into. In some places that exist. In some places it doesnt, it could but it would be expensive and that kind of thing obviously like a switch platform has to be ironed out. I think with the growth of ecommerce, however, we are starting to see movement as you know, david, china and increasingly india are sort of at the top of that list. I would imagine places like kenya will finally come on board with respect to ecommerce because you are a significant and growing middleclass that will transact there. Youll start to get the Critical Mass of businesses that are willing to take payments online and i think people will become more comfortable without overtime. Again, im not sure they will do that because poor people cash is king for them and im not sure if its completely out of the system. That have been in colombia when we started the subsidies payments. We saw a 90 of them were cashed out, massively in the first three days. We needed to create the ecosystem. We needed to work with the local movements, local momandpop shops so they cannot buy applications using that money. One hears tax money. So merchants are afraid of being taxed. So you have to be really, really smart [inaudible] even those tax cuts. So we created a lot of Public Private partnerships to create those versions. So we moved from 7 to 76 of them connected. It was just creating applications for them. They worked with food companies, all kinds of companies doing business with those merchants to create a system. We still have a lot of room to improve but we are moving that direction. Are really glad to see a question from the side of the room. I was worried it was going to be accused of bias but now ive got a question. Im glad. I hope its worthy. Im at the center and capital social equity. I hear a lot of measures about liquidity. How many transactions and that could be good or bad especially depending what the results of the transactions are. Further experiments with measures without a working capital or building credit. Do you have an account that is a compartment, 20 or whatever where they have to keep it in for a while and putting assets aggregated like a big index fund and people could develop real collateral and be under measure. Does that make sense . There is a regional banks that have worked interestingly in markets where you have a lot of payday lending that it worked on products for you keep a certain amount of money in coming you pay back a certain amount on the credit card for instance. You build a credit or increase your credit score as a result and you can utilize the savings component as so those products do exist in the u. S. Or payment cards that have something similar, but have a component where you can save money. And so, i think there is a recognition that just moving money in and out is not the goal of Financial Inclusion. The goal of Financial Inclusion is obviously financial security, nonparticipation, it better. There are individual companies that have tried to provide those kinds of products useful for people who are trying to build credit or build savings. I am seen new companies do that in the region. We have to let them grow, help them grow as well. In the case of latin america, 700 new companies and most of them are within this new alternative payment system. A bunch of them working on how to create new ways of building record and i think again, part of this is live and grow. It is very difficult for regulators to do that. One way is creating sandboxes. Lets create an environment where they can grow with political rules for you to grow. Once you are grown, youll have the maturity and then the regulator regulation could be issued. You put your finger on a really important issue which is how do you measure these things. One way people measure is how many accounts are there and then moving to measuring transactions harder but not too much harder in the more sophisticated measures it becomes even harder to get the data. The other thing is theres not a onetoone correlation. You can imagine someone very included who almost never makes any payments. They deposited into the account, the balance goes up and they are, not spending. If you decide because the person hasnt made a payment they are not included are less included that would be precisely the wrong conclusion. So your question gets that by definition this impossible to perfectly solve question of what do we measure. Its a great point we measure the easier things but not always the ones we want. Its a great point. We have time for one or two more questions in the back, please. Thank you. Many miscarriage upon the county government. My question kind of follows on the data. You mentioned early on the number of un banked or underpaid people across the country and the United States. Im wondering, is there a reliable source that of the local government was interested to know where their community was so they could target actions in a certain way that we could drill that number down in a reliable way . Im not aware of regional statistics, but the fdic as the ones that have traditionally done a study around un banked and under banked numbers in the u. S. One suggestion i could make into areas several cities have come together, cities for financial empowerment, which have coordinated their approach to Financial Inclusion to the Main Organization is actually based in new york city. I think it is cochaired by someone in new york city in the favorite cisco treasure as well. That organization should have statistics on the more regional level or the natural level so you might be able to plug and more. Woodmore last question and then well wrap it up. Hi, judy cochran with Sil International and i really appreciate what camille had to say about addressing the ultra poor. Around the world, those who are the poorest of the poor often speak minority languages that are being recognized by formal Financial Institutions. I wonder to what extent did this report take language into account with regard to inclusion . Yeah, im not sure the best way to answer this. They pay a lot of attention specifically to the issue of language with the understanding that in many places the Financial Services are developed with specific knowledge of the local languages. In many of these communities they are minority communities who speak languages outside and that is clearly a barrier to inclusion, so that is another challenge. Its a great point and i certainly wouldnt claim weve really address it. In many countries in the world we have this. I want to express my thanks to our panelists for a specific great set of questions. We welcome you to look at the website and thanks again for taking the time to be here today. Thanks, john. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]. [inaudible conversations] this hearing will come to order. Good afternoon. I welcome all of you, veterans, caregivers and advocates, especially my former colleague, senator elizabeth dole, who is an extraordinary advocate for military caregivers. Our military families, heroes and plain clothing are serving in American Cities and communities every single day. The effects of military Service Often do not end with a tour of duty. For many veterans and their families, the journey sometimes

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