Transcripts For CSPAN Key Capitol Hill Hearings 20240622

For them. But that is an a direct attack. Host bill in lynchburg, virginia. Caller to me, people claim that the Second Amendment is the most important thing. The right to vote is the most important thing right that we have, and republicans are doing everything they can, all over the country, to try to make it harder and harder for people to vote. We have holidays for everything, but the day that we elect the president or a congressman or something, many people cannot get there to vote and they are trying to make it even harder. To me that is the most important thing that we have in our constitution, is that right to vote. They do so much. Bill, what do you think about early voting, as well as a day off . Voting, they have tried to present that in some states they are working some have early voting. They make it difficult to get absentee ballots, you have to give some special cases are outright lie to get one. Now in virginia where they are oath,g about the loyalty i have another comment on that. That again is to keep people from both from voting from some for someone else. That is a violation of the right to vote for whoever. Host that will be our last call and open phones. Thanks everybody. We will be back tomorrow morning at 10 ago a. M. Eastern time, but first we want to bring you to brookingking institution. They are holding a forum on access to Financial Services across the globe. [captions Copyright National cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [indiscernible] again we are live here at the Brookings Institution for research into banking access in various countries and how technology can expand this access. It should get underway in just a moment. [indiscernible] good morning. I am gerald webb west. You to like to welcome this forum on Financial Inclusion. We are webcasting this event live, so i would like to welcome our viewers from around the world, and for those of you who are wishing to post comments or questions during the forum, we have set up a twitter feed at financialinclusion. We would welcome any comments that you have on that. About 2 there are billion individuals who do not have Bank Accounts. This obviously makes it difficult for them to Access Financial services, pay bills, or transfer money to friends and relatives. In addition, it is hard to be an object and are in that situation , when you are outside the formal financial system, it is difficult to gain access to capital or two for businesses when you do not have access to basic Financial Services. That manyod news is nations around the world have made commitments to expanding. Inancial services for the poor a number have signed my declaration on Financial Inclusion, have pledged to recognize the importance of inclusion, develop a Financial Inclusion policy, and implement it Regulatory Frameworks that encourage inclusion. The firstre launching scorecard,kings measuring progress on Financial Access and usage. With the Financial Support of the bill and Melinda Gates foundation we have embarked on a threeyear study of inclusion in 21 developing countries. A short summary of our analysis is that Financial Inclusion is taking off. There has been a surge in access to Financial Services, this is happening through mobile money, nonbank providers, and digital Financial Services. Africa is leading the charge in area. Ea in this four of the top five countries in our ranking are in africa. There is a lot of exciting and innovative efforts taken place here. We have a short video that captures more about this project. It is two minutes in length, so we are going to roll that video and then we will go from there. [video clip] about 2 billion adults around the world do not have access to Financial Services. This is where the idea of Financial Inclusion comes into play. This Product Research 21 economically diverse countries to develop ideas to broaden access to Financial Services. 4 dimensionsor of inclusion. Country commitment, mobile but also through Innovative Digital Services like my mobile money accounts. Mobile money is a lifeline for millions of under banked people in places where access to Traditional Banks is limited. People can use a mobile find to pay for goods and services, receive the funds, and Access Financial services. This is running away for developing countries to grow their economies. Tanzania has 95 million mobile transactions per month. It became one of the first country to connect them, allowing them to easily send money to people on a different network. 2013, 73 of brazilians live within five kilometers of the Financial Services institution. In india, ang subsidy for liquefied Petroleum Gas has delivered 2 billion to Bank Accounts. Saveatives like these can the government money and help individuals receive funds more securely and reliably. To see where the nations we evaluated right on our scorecard, go here. Our project seeks to answer three questions. Do country commitments make a difference in terms of project progress towards Financial Inclusion . Do to what extent do mobile technologies advance inclusion . And what legal policy and regulatory approaches do the best job of promoting Financial Inclusion . So we analyzed inclusion in nearly two dozen different nations. That includes places such as brazil, colombia, india, indonesia, kenya, south africa, tanzania, among other places. This week we have published our scorecard and our report. There are Copies Available for those of you who are here in the auditorium. Are those who are watching the webcast you can download our report that broo kings. Edu fdip. This is the first of three annual reports, so we would welcome any input that you have. Be thinking about our methodology, our indicators, and our recommendations in terms of future reports. We would like to hear any suggestions you have. Commentst detailed from every country that we included in our report. We also talked with many leaders in the world were active on Financial Inclusion, and we are very grateful for their suggestions. To give you a sense of the highlights of our study, my colleague will summarize the key findings. Is a nonresident senior fellow at brookings and a professor of electrical engineering, public policy, and management at ucla. He has an extensively on technology, Financial Inclusion, and developing world. And then after johns presentation we will hear from several experts who will offer their suggestions on how to improve Financial Inclusion around the world. I will turn it over to john. Thanks to all of you. I know that there are many things you could be doing on this absolutely gorgeous day here in washington, or if youre somewhere else in the world, there are also other things you could be doing. We are very appreciative that you would take some time out of your day to be with us. Im going to spend about eight to 10 minutes going over some of the highlights from the study. Just to echo what was explained a moment ago, the objective is to evaluate Financial Inclusion as well as the progress in each of 21 countries. You can see the list of 21 countries appear. I wont read through them all. But one kind of overarching characteristic you will hopefully notice is that this is a very Diverse Group of countries. It is diverse economically, geographically, politically. We have some small countries there. We have some enormous countries like india. We chose a list like this because the cells by casting a wide net and looking across a broad array of countries. We are not limiting ourselves for example to only one region of the world. These are the overall scorecard top. Ts, ranks from kenya, sepp blatter, brazil, rwanda, and uganda. These are the overall scores. We also ranked each of these countries through each of four dimensions. To measure Financial Inclusion we identified four key dimensions. One is country commitments. The second is mobile capacity. The third is regulatory environment, and the fourth is adoption. Scores forregated all of these together to come up with the overall score. In this in the report you can see the breakdown. So for example, on the adoption dimension we were fortunate to be able to have access to the data from the world banks global index which just came out a few months ago, and for some of the other dimensions we drew from a number of other data sources. Some overarching observations. Countries are making really progress. There is really good news on that front if you look to where things stand today versus where they stood not too many years ago. There has been enormous growth, for example, in a number of mobile money deployments, which are really playing a fundamental role in many jurisdictions. We see clearly there are multiple pathways to Financial Inclusion. In some countries, for example that is,bile money using mobile phones as a platform for transactions has been an absolutely fundamental part of the inclusion story. But another places, for example in south america, where there is a very welldeveloped , the banks canks that extend their reach by sort of Correspondent Banking associated with other industries that can allow people to have Banking Services closer to their residence or their workplace. That model has worked very well in south america, and mobile money we have seen less penetration of mobile money and south america. There is really no onesizefitsall. There are multiple ways to provide inclusion, and the good news is were seeing Good Progress on multiple pathways. Is throughbservation our study we did emphasize and take a very close look at bank and nonbank Service Providers. We believe that these are increasingly important mechanisms for financial of theon, just because complexity of the geography and the infrastructure in many places. It will be a very long time, if ever, before you will see Traditional Bank branches, brickandmortar, in many of these smaller villages and towns in some of these countries. Whereas of course, many of these places are covered or will soon by very goodg mobile phone service. That allows that service to be a platform for financial transactions. I will summarize five key findings. One, country commitments matter. There are multinational Financial Inclusion networks such as the alliance for Financial Inclusion, which mild declaration through that. Countries that signed up for the minor declaration are in many cases making good on commitments associated with that. There are countries that joined the better than Cash Alliance, which has also being a critically Important Organization for promoting Financial Inclusion. Countries that actively engage , in those sorts of networks general, we found that those networks are extremely important and extremely effective in promoting inclusion. Secondly, digital Financial Services can accelerate Financial Inclusion. Advantagesnormous manyiated with digital in environments, including in Financial Services. This is not mean there are not also concerns, for example cyber security. But for now we believe the Digital Financial transactions offer enormous advantages in terms of security, efficiency, cost efficiency. As those digital Financial Services become more common, we believe that we will have positive feedback with respect to promoting Financial Inclusion. Generallygraphy matters less than policy, legal, and regulatory changes. That said, we still observe some regional trends. For example as i mentioned, you see mobile money being much more common in places that lack much of a Traditional Banking , whereas with places with a more traditional interceptor you see mobile money playing less of a central role and banking correspondents play more of a central role. Fourth, poor nation key players is really important. Clearly if you are looking at Something Like mobile money, that impacts clearly the telecommunications industry, but also it impacts banks and ministries of finance, and things like that. That are complex questions his government and regulatory bodies, and so on, when you are trying to make sure that these services can be provided, available at reasonable cost, and, critically, can be interoperable. For example, a consumer is not locked solely into sending or receiving money from people that happen to be customers of the same mobile phone. Whererdination is an area it is extremely poor and for governments and the private sector to be engaged. Last but certainly not least, full Financial Inclusion cannot be achieved without addressing the gender gap. We are certainly not the first to recognize this. It is well recognized, that there is a persistent and significant gender gap, under which women are often significantly more excluded from global Financial Services than men. And of course you cannot have full Financial Inclusion unless you have Financial Inclusion for everybody, including women. So closing the gender gap, which unfortunately has not significant we appeared to close in the last couple of years in general, is something that is really important. The final point i will mention here is that it is important to account for diverse cultural contexts. To bring countries have different sorts of interceptors. I will give an example. In the philippines on jobs have become very important physical pawnshops. You can go to a poncho and they will transfer money to someone else in the philippines. Different countries have different infrastructure that can be leveraged to deliver Financial Services. What works in one place may not necessarily be accurate applicable in another place. Moving forward, as theyre all mentioned, we are just completing the first year of a threeyear project. We are going to be publishing an annual report at the end of the year. We started this project one year ago, the report that we published this week is the first of those reports. We plan to publish another report a year from now, and then a third report a year after that. We are very interested in continuing to foster dialogue among the many very active in critically Important Organizations, which includes not only private Sector Companies and organizations like the alliance for Financial Inclusion and of course the governments themselves that are trying to work to promote. Inancial inclusion i will close by mentioning that we welcome feedback. We want feedback. Anytime you try to devise a scoring system there are choices that you make. It is impossible to design a system that is perfect. We think that we have done a reasonably good job, but we are also confident that we can do a better job. We would welcome feedback from the community on ways that we can improve our methodology and our analysis in the future. So that we can have an even better product as we continue with this project. We are also considering expanding the scope of a number of countries, beyond the 21 that we have identified in this first report. Onwould welcome suggestions countries with people in the community believe are particularly important for us to consider in future rounds of the study. With that i will move on, and i will ask our moderator and our panelists to come up, and we will have what i am sure will be a very interesting discussion on Financial Inclusion. Thank you ray much for your time. Thank you very much for your time. [applause] thank you. Im just looking out at a very long and skinny room. I am already seeing one of my challenges today, which is going to be spotting you guys in the back. We are going to make you participate actively in this. Were going to take the classroom approach. The world sean, i am trade editor of the financial times. Washingtonnomics for and i am very interested in development and things like Financial Inclusion. Thats something ive been one of the many things i have been learning a lot about. Ourved in january from headquarters in london. Im very happy to be a. To be up here moderating this discussion. Also as i learned over the last few days, i am the stranger on this page. Ande are all friends colleagues. They all know each other from the world of Financial Inclusion. I am the one unknown here. Theel a bit like that stranger invited to thanks giving dinner. I will do my best to be provocative as a result. Let me just quickly run through our panel, and then move on to our discussion and get out of the way and let these people who are some of the leading experts on the subject share their knowledge and their thishts on the back of very good new report. Starting all the way on my left eora, she is the lead economist at the Development Research group at the world bank. She is. The keeper of something called whichobal index report, has everything and anything you would ever want to know about Financial Inclusion. Also the data that the brookings report is based on. She also if you go visit her, will give you a little databook on Financial Inclusion, which has just about every statistic you ever want to know about Financial Inclusion in the world. Grossman,r is jerry jerry senior at advocacy and regulatory specialists. Who to him, karen miller, is chief knowledge and Communications Officer for womens world banking. Very wellplaced to talk about the gender gap that john mentioned. Her is a Government Relations specialist at the better than Cash Alliance, which is a u. N. Based Cash Alliance. He was up early this morning grabbing the train down from new york. ,nd next to me here is laura who is the senior policy director for Financial Inclusion at the u. S. Treasury and can tell us a little bit about why the u. S. Treasury can do all this. I thought we would start with le ora to really sort of give us the 30,000 foot view on what is happening in the world of Financial Inclusion. I mean, some astonishing things have been happening in recent years. Something like 700 Million People have gained Bank Accounts, but there were also some remarkable challenges. Why dont you give us that broadview. Thank you. And thank you for a nice presentation of the report. So what is the landscape . The landscape today is defined as 2014. About 62 of adult around the world have an account, either at a bank or Financial Institution, or a mobile money provider. This has increased by 700 million adults since 2011. Globally, only about 2 of adults have an account with a mobile money provider. Up to 12 in Subsaharan Africa, this is of them the only account of a house. This includes tanzania, kenya, uganda. People have an account with a mobile money provider dan with a Traditional Bank. This technology is changing the financial landscape. 4g coverage is not important only for mobile money accounts. For example in china the government moved to rolling out Digital Payment for government and over half a million momandpop shops now operate on that banking system. The 4g network is driving many inounts, mortgage accounts, 2017 we will probably be asking questions about products that we have not even dreamed up yet. So yesterday i logged on to the computer, set up auto bill pay for my Students School year. It was really can be in. For tens of millions of adults around the world, these payments are game changer. Bangladesh, in helping them automate their payments. Textile workers tell us how on payday their mother will always wait outside the gate for them to take their pay away. And now that they cant, but there has been no their base salary. They keep track of their overtime and they save a little bit every month towards expenses for their children. This is offering privacy and control over money, especially a wage payment that people never have before. It is also safer. For example, a study in the u. S. Found that after the u. S. Digitized electronic payments, crime fell in the midwest. It also is critical for womens Economic Empowerment. With rigorous randomized controlled trials are showing that giving a woman an account where she can keep her savings gives her control over Household Budget decisions. She is able to discuss budget spending with her husband at more opportune times. It does encourage that i, the same way have throughout her deposits. Think about 401 k plans. It takes away the need to wait online. That location of spending the money because the money is taken off the top. We did a field study in ghana, we are running preliminary results. Got it was one of the first tontries to commit digitizing all of their government wage payments. Also reports takes the wages into account. We have also done off that savings. 10 of 10 of salaries. And finally, it allows people to build credit histories. I think one of the most exciting innovations happening today is knowing that credit score is based on payment history, the same way over the past 10 years banks and other lenders have been showing if you get remittance payments every month, or wage payments, this shows that in the future you are able to make to pay back a loan payment. Increasingly now, tens of millions of new people, by digitizing their wage payments from the government to the private sector, suddenly they have a payment history. In kenya and elsewhere, this is being used, especially by Small Business owners, to allow them to get appropriate credit. However, certainly we need to highlight that there are challenges in digitization. There are challenges at the very basic level of id. In many countries, bangladesh people especially women dont have any form of identification, which is a necessary step. As an interesting aside, in bangladesh the employer records counts as identification at the bank or Financial Institution, but we cannot get them mobile money accounts because to buy a sim card requires that account. Thats what they dont have. We certainly have infrastructure, as my colleagues will talk about. And also basic education. Taking sure people understand that they need to keep things private. In south africa and number of toen we spoke to strangers withdraw the money for them, because they do not feel comfortable using the machine themselves. This with a favorite story. We were recently in gambia in a in a ruralge village talking to a schoolteacher who says she is paid by the government in cash. The first two days of every month she closes the school in the village so she can travel by bus to the capital to collect her money. Complainingming to us about the danger, the Security Risk about traveling around with cash in her pockets. By digitizing her wage payment, the school can be open for an extra two days a month. Financial inclusion, we like to say, is a means to an end. It not only allows people to have a safe place to keep their money, it can have a real effect on other people as well. Number one. Reason more school for zambian schoolkids. Loretta, this is on the agenda at the u. S. Treasury. Tell us a little bit more about why it is important for you at the treasury. Thank you, yes. Thank you for having me here. I was asked to come and talk about why does treasury care about this and what are we doing about it . Pleased to say that this is definitely a very high priority becausesury, not just Financial Inclusion is a good thing in its own right, at an individual and household level, but numerous studies have shown that there are broad Economic Growth and stability issues related to Financial Inclusion. At the evidence for this is growing by the day. Also financial exclusion presents a problem for a lot of individuals and countries in terms of the filling of fulfilling their potential. Because ofo add that the economic applications of inclusion, that Financial Inclusion is also a high priority in conjunction with another of treasuries high priorities, which is safeguarding the Global Financial system from abuse. Are having to operate in the informal sector, they are not able to be accounted for in any kind of safeguard or any thing like that , traceability when it comes to Money Laundering or terrorist financing. This is a huge problem for policymakers all over the world. Treasury is very keen to see everyone involved in some kind of formal financial service. When i say that, i dont mean that we want to see everyone forced into a big fancy bank account, but rather that if there are services out there that are meeting the needs of individuals, especially low income individuals in developing countries, and they are not danal, we dont abandon them, we formalize them. The other aspect of this being a priority at treasury is the fact that we are very much advocating technology and Financial Inclusion, which of course is a big part of this report today. New technologies are obviously rapidly changing the face of Financial Services everywhere, enabling Service Providers not only to reach into remote areas and get up to scale much faster, but also it allows Service Providers to come up with far more service responses, that actually meet the need of individual consumers. And of course as i mentioned before, the digitization of all the Services Mean that all the services and transactions are traceable and accountable, not just for antiMoney Laundering purposes, but for Consumer Protection. Does treasury fit in with this whole agenda . From an International Perspective we are very heavily involved at the Global Policy level, whether it is with the g 20 Global Partnership for Financial Inclusion, where we are working very closely with all of their subgroups, particularly on market and Payment Systems, Technology Enabled solution, customer protection, remittances, and the rule of global standardsetting bodies. We work very closely with all of our friends on a number of these issues to make sure that they are taking into account the particular needs of low income ly excluded individuals. We are also heavily involved, which a lot of people dont fully realize, but treasury has an office of Technical Assistance that work very closely, bilaterally, with a number of their counterparts around the world. Whether it is Central Banks, finance ministers, what have you, on strengthening their own financial systems, whether it is through a regulatory perspective or a government accounting perspective. News is that the importance of Financial Inclusion and the importance of digital Financial Inclusion are broadly accepted around the world. Which we cannot sniff at. This has really been quite a phenomenon over the past two years. Those that have been working in the field were arguing these points to two beers ago, and now everyone agrees. The challenge now, with everyone agreeing, is that the environment is no changing for them and they are saying, wait a minute, we need help. How do we do all this . Yes, you are right. We have to do all this, but hardly do it . There is a growing need for assistance for a number of policymakers and supervisors in the emerging markets. Bank er of aries areas some of the key once i will mention our supervision of digital Service Providers, what are they are banks or nonbanks. The traditional supervisor and regulator out there has to do they been working with banks only, with sound regulation. Now we have all these new players who are Digital Payment players. They are playing an increasing role, where we need to come up with new rules and way of operating to deal with these different kinds of players. Supervision of Digital Currencies. Bitcoin is getting all the press these days, but the whole issue of Digital Currency and isereign Digital Currency just going to keep growing. Supervisors need help in figuring out how to do this very in figuring out how to do this. And those of you who are steeped in this world know that the Financial Action task force has stressed repeatedly that they expect countries to meet their needs in terms of Money Laundering, but that they are allowed to do that in a riskbased approach. Sayt of countries, they yes, ok, we believe you. But how do we do that . There is increasing conversation at the national level. Consumer protection, in the face of new, instantaneous digital transactions, thats another harriet that policymakers are having to think about. For ant use an ombudsman digital transaction. The horse has left the barn by that point. Things like Digital Identity programs, that we already mentioned, are critical in countries around the world. Depositccounts insurance. Most of us take for granted that our Bank Accounts are insured. Well, you have all these new moneys, including open players, keeping their funds in trust accounts, etc. , that are doing also the phenomenal things and expanding the role of services for people, but there might not necessarily be insurance for this account. More regulators are thinking they have got to figure this out. Even our fdic is looking at this for the world of prepaid cards in the u. S. And then of course, digitization of payments, which plays a huge role. My colleague will no doubt touch upon that. As i said, there is a lot of enthusiasm, which is great to see. A lot of acknowledgment. And a growing commitment, which is fantastic. Now those commitments he to be followed up with action. That is a great aspect of this report that has come out, is being able to measure how well some of these countries have done, and how they have done compared to each other. As ariasr airy that we and the rest of the community can support them. She has tv you up beautifully here, hasnt she . Actionis the time for then surely you are the action man. Theare one of the people government can call when they need help. Why do you talk a little bit about what you are hearing from governments and talk a little bit more about the better than Cash Alliance and what you guys do. That philly. Thank you sean. Congratulate you on your great work, for us this is a really useful tool. There often we speak to government officials they want to know how others are doing, and what interesting lessons they can learn from other governments. This is a very useful tool. Congratulations. Maybe just a word about the better than Cash Alliance. This is a u. N. Partnership with International Organizations, and donors, that are all committed to the shift from cash digital. Ayments what we see with our work is that there is interest from government officials in the issue of digital Financial Services, and the benefits that governments can read out of that transition. Very often we speak to government it often comes from one aspect. We mentioned the issue of transparency or security. With howrnments deal to design the best digitization scheme, they think of one aspect. But there are more benefits. There could be a digitization of Payment Scheme that could deliver security but also transparency. Of coarse issue of Financial Inclusion. That is where they are interested in learning from other governments or in getting some news from this report, is to understand how to make the most out of those programs. Us abouthem speak to their issue of eliminating ghost recipients for cash programs and others. What were trying to do as an alliance that brings together government and companies and International Organizations is to help or support governments with the issue of developing digital inclusive payments. I know thats a bit of a mouthful. What to remain with that . In order to expand Financial Services for everyone, meeting people, cavities, governments, entities needhose to be able to receive payments and make payments. Enough to make a digital transfer, the reverse scenario would be for you as an individual to be able to view that account and receive and make payments. That is a clear request for governments. They are looking for a party that will support them in having a collaborative approach where governments in a certain country Work Together to develop these this ecosystem where everyone can make and receive payments. That will ultimately deliver what we are all trying to achieve, which is Financial Inclusion for all. We were discussing, right before you asked me if i thought about an interesting example i immediately thought about india. India is a place where we see all of this right now happening, and many in this room are working on it right now. I year ago we see the government of india launching a new financial inc. Is an scheme, and in the year they opened over a hundred 17 million 117 million accounts. But the government is trying to go beyond just opening the accounts but also making sure those accounts are used so that they do not remain dormant accounts. Been transferring pensions into those accounts and making sure that those individuals actually start using them to make payments and receive payments. I think we should come back to india later on. Fascinating, that issue of dormant accounts. I think the figure i looked at the other day is a hundred 175 new accounts at half of 175,000 new accounts but half of them have a zero balance. I wasestion of gender, really interested what we were talking a couple of days ago about this event. You mentioned the fact that one of the issues you guys are working to improve is the fact to pushot of efforts Financial Inclusion actually managed to exclude women, or to make it harder for women to open Bank Accounts. Just talked to is a little bit about why that gender gap exists, and why it is that those efforts to address that are not always working. Thank you. I think the really interesting thing that we need to understand what we talk about women and itancial inclusion, is that does not require the key players out there Financial Institutions, regulators it does not require a Major Overhaul and what theyre doing. It just requires some tweaks. Frankly,equires understanding what women want. There are very few industries i think that we would look at that are targeting women that would actually go and understand what want and need. Or think about Digital Financial report there the is a lot of reports about mobile money accounts. But when we think about what our womens needs, how do we address them . Savings is such a critical component of this. Workcently did some looking at the landscape for digital saving, what was happening out there. What good examples there were, and how we could rescale. Savings,think about and you think about what women need, they want convenience. They have such busy lives, between being the manager of the household and working. They dont have time, and we have heard this over and over again. They dont have time to go stand in line at a bank branch to deposit their money. Or they are so far away from a bank branch that the money it would take to take a bus to that bank branch was actually more than they were depositing. Digital Financial Services has an incredible potential to serve for thateeds convenience. It also helps address security. Women as we are was talking about, carrying money around. Cangital savings account help address that security issue. A confidentiality which is so critical. That theants to know money that she arts is safe, that she can control her own assets, and not have to be ,haring and telling her husband her relatives, other friends in the village what she is doing with her money. Accounts in aings digital environment, i think are the critical product to help with Financial Inclusion. Things that john had said at the beginning is, the models look different. When you think about digital savings and the context of an aging banking model, one of my favorite expressions that just came about in the two weeks. Our team was in malawi. And said that savings banking go together like fema and relish. It is like Peanut Butter and jelly. Populations are really starting to recognize what delivering a bank product to a woman is going to do for her. We are absolutely excited about the opportunities that digital Financial Services have for toen, fundamentally we need start with the understanding of womens needs, and we need to be having genderbased to data, so you can actually measure what is happening with your women clients in the with your women clients. That we did, so few companies were actually organizing their data by danger. By gender. Their data so how could they know if they were serving their client base appropriately . I will just leave you with the message, start with understanding women. Will find that Product Design comes into play. It will be a welldesigned product. That will help men also. One of the great things we always find is, if you design a product for women, men will like it also. If you dont take into account womens needs, they are not going to get up. A rule fornds like life. Jerry, from the industry perspective. You are, to get a bit corny hair, you are the guy who put the mobile in mobile money. I am struck again by the discussions we had a couple of days ago about this. There are still some very serious regulatory barriers out there, some challenges in terms of rolling this out in countries. Ofm also struck by the scale the challenge. The reality is one in 4,183 and a half of the worlds population do not have a bank account or access to Financial Services. Just walking through for me. From a telecommunications perspective, what are the challenges that you see. Thanks. One of the benefits of being the last person on the panel to speak as i get to listen to the insights from everyone else and comment on them. Thank you for giving me that opportunity. Just turning back to the report, we only had it up for a short time. If you look at the list of 21 countries, one thinks one thing i noticed right away it is countries,rse set of ranging from middle to upper Income Countries all the way down to quite low Income Countries. Anerally speaking there is strong correlation between level of Economic Development and Financial Inclusion. But what you see in this case is that the number one, the number four, and the number five countries are all low Income Countries. Kenya, rwanda, and uganda. The countries around them are all wealthier countries. Why is that . Of those countries, Financial Inclusion is being driven by mobile operator led operating schemes. I think that is a very important thing to remember. We were talking about the fact that only 2 of the accounts around the world are mobile money base, and even in Subsaharan Africa we are only looking at around 12 . There is huge opportunity to grow, and a big part of the issue is the regulatory environment. Has seenan africa higher levels of growth of mobile money because more countries there have taken an enabling regulatory approach than in other price of the world. The truth is is that while we often think of Subsaharan Africa as kind of a monolithic low income area, there are significant differences and the levels of Economic Development both within Subsaharan Africa as a whole and within countries in Subsaharan Africa that are achieving high levels of not just adoption of mobile money, actual active usage. If we look at the top 10 countries around the world with respect to not just mobile money adoption, it active usage, and we define active usage based on usage within 90 days. Which is a much shorter. Than a bank account would traditionally be considered to be active or not dormant, which would be about a year. But in the context of the top 10 countries you have some lower Income Countries, like kenya, tanzania, rwanda, uganda. Then you have middle Income Countries like namibia. You have four countries in southern africa, four countries and used africa. In also have cote divoire west africa. We also have paraguayan south america, which was highlighted south america, which is highlighted as an area because they have more Traditional Banks, might be less receptive to mobile money. Well o highlight that mobile money while mobile money has developed in africa, it is not an african story. With the right regular regulatory environment, mobile money can develop into verse economic environments around the world. Why is it important that you have an enabling versus nonenabling regular tory environment . Today we have a mobile money tracker and we track all the countries around the world which have at least one of mobile money service. That can be a bank listed service, or it can be led by some form of a thirdparty entity that is neither a bank nor a mobile operator. Today just over a third of the countries that offer mobile money products have what we consider to be an enabling environment. That is one where there is a level playing field, where banks and other third parties can all directly offer mobile money services. It is one way to services can be rangeed through a broad of networks, where customers can be registered at an agent, where customers can go and catch in and cash out at an agent. It is an environment where there is a recognition that what you do need prudential regulations in place to safeguard customer funds and its your ensure protection of customers, you differentiate between mobile money and banking because the risks are different. And it is an environment in which interoperability, well very important, is not mandated at an inappropriate time or using a model that is not commercially viable. It is around the world, not just in Subsaharan Africa, if you look at all the countries with an enabling regulatory environment, and all the countries with a nonenabling regulatory environment, active customer usage with respect to usage of an account within 90 days is over three times higher in environments that we consider to be enabling versus nonenabling. As i said, the top 10 countries with respect to active accounts as a percentage of the Adult Population are all countries which have an enabling regulatory approach, and all those countries mobile operators are leading in driving Financial Inclusion with respect to mobile money. I think that is very important point, but i dont want this to mos, andanks versus m you hear that a lot. Think that this is completely the wrong idea and the wrong approach. The potential for digital Financial Services and for mobile Financial Services is huge. Is very big and it is just starting to get opened up. Knows mnosma see these opportunities, there is an opportunity to target a market that is not currently viable. It is not viable for Traditional Banking institutions. Mobile operators having a for structure and they can build a mobile money and for sector. These are the rails. This is how you bring people out of the informal sector, where there are saving money in their homes, under their mattresses, perhaps investing in livestock, other ways that people who dont have access or dont have access , you can bring them into the formal Financial Sector. Once that money is in the formal from aal sector, macroeconomic perspective it can be a can intermediated which can contribute to Economic Growth. Beyond that there are a number of other major benefits. Now banks have the opportunity to provide credit. Have the opportunity to provide savings. The banks are offering these services. Insurance companies have the opportunity to office offer these services as well. Look at one example from kenya. Offered at the banking service, the deposit and credit services, was awful offered by the commercial bank of africa. Once they set up the service they went from 89,000 accounts to 897,000 loan accounts in one year. Deposits from the service in one year reached 24 billion kenyan shillings, which is about 245 million. Most of this money is coming from under the mattresses, and it is coming in the form of financial deposits. Casey being set up a service that is now focused more on the sme market, providing loans of up to 10 u. S. Dollars. I really believe that we should not focus on banks versus mobile operators, and the opportunity for both to Work Together to help facilitate real and full Financial Inclusion. Great. Mnos, just for people who are not familiar with the acronym stands for . Mobile network operator. I just want to come back to something you mentioned there, and that is india as an interesting case study. Im going to throw it back to leora, india comes up as a country that is doing interesting stuff. So does peru and a few others. That when you look out there, which are the countries that are sort of leading the way on Financial Inclusion struck out you are not allowed to name kenya. I am going to touch on a country we have not touched on, which is brazil. To the coming back paymentinstead of the chicken ad the egg and building a financial infrastructure, you look at latin america where we have seen doubledigit growth. And across the region. Really anchored by brazil and mexico. Again, i dont have evidence in this, but the perception is of a normatively enormous sleep high rates. Have an average in latin america [indiscernible] as a result, really interestingly, latin america is the highest region globally of people swiping their atm cards to make a payment. The same way we do. Half of adults are saying they regularly swipe the debit card to make a payment. And i think what is happening is, he know, the government passed private sector governments and they are doing it for selfish reasons. They could save up to 40 of costs just by having their payment. I was telling the story earlier from bangladesh, where one owner they have to close their factory for days to make these payments. So benefiting the employers, and Financial Sector. And the Financial Sector is responding by repeating by implementing this pointofsale infrastructure. 40 of account. I would say that this is really an opportunity. These are brandnew accounts. I was highlighting, we missed, especially women, who had their first account, now the challenge for india is to really step up and create a purpose. Digitize payments. And making it easier for people to keep their money in an account by developing one thing with india, which is very noteworthy, also that the adults with account to say the have an atm card is very, very low. Again, making accounts more convenient for people to use and keep their money there by encouraging the debit cards. Thanks. Theeah, just to add to india story, yes, i mean, they have made a huge public government commitment to this. I am sure you could argue that there is a degree of topdown mandate activity going on there, which always has next success in the marketplace. But to their credit, india has also acknowledged thats not Everyone Wants a bank account. And they have recently licensed the 11 new players who are called payment bakes thanks. Banks. I think there were licensed just in the last week or so. So india deserves a lot of praise for knowledge and that Customer Choice is just as important as access to a bank account. And, yes, totally agree with the comment about not just government payments, but also the ability to have other places to use your account, to use your card, the whole Merchant Acceptance side of things. This is one area where my colleagues at usaid are doing a great deal of work with indian agencies on putting together an extensive digital Merchant Acceptance network for this purpose. You want to talk about the [indiscernible] example from the mobile perspective . Sure. In my prior life, i worked on regulations. ,ooking at branch with banking electronic money, whatever you want to call them. Different laws and regulations related to Financial Inclusion. And india, you have seen over time they have continually loosened up their approach. But it has been a very, very slow progression. In 2006, i believe, it india initially released their regulations on what they called a business correspondent, which were essentially banking agents. When they first released them, they were very strict. I believe in limited them to nonprofits. Most commercial actors, stores, merchants were not permitted at all to provide services with extremely limited. Then a year later, they said, ok, we will allow certain Financial Companies to offer these services. Slowly over time, they started opening it. But it was always limited to banks. Then eventually they came up with some form of a payment provider, which was similar to a mobile money provider but had very strict limits on the types of services, the values that could be transmitted through the service. And i believe there was even a prohibition on cashing out. So i didnt have the full functionality. Now they have come to the recognition over time that these efforts needed to be widened even more. Now they have come up with the payment banks, which have a lot more functionality. And they call them that, so you may think that they might intermediate funds the way a typical bank would do, but they dont. They really operate generally issuer and that they can collect funds from the public, but those funds have to be placed in banks or, i think 75 of it needs to be placed in the indian treasury bills. So you see over time that they started to move to a more and more open approach. And now you have seen with the 11 that would just license, i think five or six of them have mobile operators who are leading or very actively involved in the scheme. So i think there is a lot of forward. Oing and correct me if i am wrong, india now accounts for one in five . Yes. It is fascinating. And they have 900 million cell phones in circulation. According to the little data book, just two and half percent of the population now has a mobile account, which is pretty astonishing. Since you are the man who brought up india, you want to come back on india . I just want to mention one thing, which is the issue of time. We are seeing this scheme is just one year old and the progress that has been made, including now with cooking oil gas subsidies into those accounts has already achieved for themillion savings government, and im sure we are going to see more and more as the government sees theyre making their operations more efficient. But also the issue, as you mentioned, there are people who are managing their financial lives. And i remember myself visiting a small corner shop in india and walk into the store, there was this woman had an account. She walked into the store, asked the salesperson, who is also an agent, to cash out some money. Then she cashed out and he asked if she could pay and buy some products. I asked her, why do he does pay for the goods transferring from your account to his account . She said, i dont know. When you pay for something, you pay in cash, right . And then i asked him, why dont you encourage her . And he said, i dont know, i hadnt thought about it. She hasnt a kind, he has an account, but she still makes a payment with cash because this is the way people are used to. So i think it is a little bit premature to judge after one year of an incredible scheme. We are talking about the biggest Financial Inclusion scheme, the biggest id scheme, the biggest in the world. Were talking about the biggest scheme. The scale is just so big, it is going to take a while to see all the results happening. I am keen to open it up to the floor shortly. But i have one last question from the podium here that im going to reserve the privilege to ask first. So if you can get ready. We do have some microphones that will come through the room when we reach the floor. And i want to go back to something you said at the very beginning. You set in 2017, youre going to be considering products you dont even know about right now. I want to get each of you to think a little bit about the future of Financial Inclusion and a little bit about the cool new thing. Is it going to be bitcoin . Is it going to be some kind of other sovereign Digital Currency that we are going to be talking about . As you think about Financial Inclusion, what other cool new things that you think about . Lauretta, maybe we will start with you. The future of the Financial Inclusion. What excites you . Oh, jeesh. I didnt prepare for that one. Well, i mean, without a doubt, the growing movement of towards some sort of mobile device and the moving away from the branch based activity is enormous. Mean, just the growth of smart phones, lowcost smartphones across the developing world is phenomenal. Five years ago, we would have never anticipated the number of smart phones in the developing countries right now. And the numbers are just growing amazingly so. And, yes, the issue of Digital Currencies is definitely going to grow. But i dont think bitcoin is going to be the answer. I think there are going to be other areas. I think Central Banks are going to start looking at how to issue their own Digital Currencies. Mintingad of, you know, a bunch of quarters, they are minting digital equivalents of those. So i think those are some of the some of the innovations i think we are definitely going to be seeing. We are already seeing any number of applications out there on Financial Education, managing your money, etc. And like many things, these are going to transfer into lowcost, low income regions and we will find the same thing in other places. So, it is very hard to anticipate the future because things new things are coming up every day. Mr. Donnan and at this point, i offer an apology because i promised i wouldnt ambush you on stage. [laughter] since you brought it up, what are the what are the great innovations . I also say this, michael, sitting behind us over our heads is the center for technology innovation. You know, i agree [indiscernible] and a number of oversized samsung knockoff smartphones was absolutely mindboggling. It will blur mobile money accounts and mobile banking money accounts because people say, well, i use my smartphone to make banking transactions. So they are harnessing the capabilities. So i also think there is an exciting growth in the use of Digital Payments to provide basic services. The growth of the prepaid electricity minutes, providing so, basically, electricity and other infrastructure providers will invest because people can prepay on their phones. The increased use of payments of sanitation. , oneit was worth visiting of these toilets where you make a payment from your smart phone, which keeps it clean and safe. Thethe ability of greater ability of the growth of Financial Inclusion to enable basic services for people. Mr. Donnan mobile sanitation, im glad you explain that. Gerry . Well, it may not be as sexy as talking about bitcoin, but the move towards real Financial Inclusion from what has traditionally been more persontoperson payments and services that mobile money really kind of started out as, to moving into what karen was talking about in providing real digital savings. Triedmple where tanzania decided to take all the interested earned and paid out to all the users. That is small customers, their agents, any user that had money in the system. All of a sudden, people who could have never afforded to have a bank account and earn savings on that bank account were suddenly getting interest. A small amount, but they are getting something. If nothing else, that helps to inflation. Savings,credit credit, and moving towards the shortterm small emergency loan products to things more like microfinance, enterprise access to Financial Services, insurance, there is a long way to go with all these products. We are seeing a lot of International Remittance products. Not just from wealthier countries to low Income Countries, but we are noticing with mobile money, a lot of connections, particularly within Subsaharan Africa, where youre seeing Different Countries interconnected services, either with the same provider or different providers to be able to provide access in a region of the world where borders are kind of arbitrary and people have been traveling and living across borders for many, many years. So i think those the are these exciting things for me. Mr. Donnan karen, im going to come back to you next, but first, i want to come back to loretta. You didnt have to cut straight to me. It is not like some new innovation i just thought of. What i did want to make a point, partly following up that when we talk about Financial Inclusion, we the royal we tended to think about just the regulator, the financial regulator. Or maybe the sin tech industry. But the reality is that from a technology perspective, fostering the growth of this industry involves multiple levels of government and involvement. And we cant forget that. So a government might make a commitment to Financial Inclusion, but if it is only the financial regulator, they are the ones were are responsible for customer ids in that country. There are multiple agencies that come up with customer ids. There needs to be brought a coronation between all those players. Lets not forget that in many countries in the middle east and north africa, other Government Departments have guardianship laws that prevent women from opening up their own bank account. Without, you know, the permission of a male relative did so if you dont deal with those folks, then all these great initiatives are not going to get anywhere. And then, of course, to the point about all the different ways that these services can be used for education, energy, ulcerative things, so we mustnt forget that this is not just about talking to the finance guy. Areas of aoss all countrys policymaking environment. Mr. Donnan that is a really interesting point. That need for quite a nation. When you get the kind of Central Banks talking to the finance ministry talking to the german occasion ministries talking to all the rest. Anyone knows that couldnt nation is not always easy. Karen, i cut you off. I am sorry. You didnt cut me off. That is ok. I think what is really exciting for us is what technology is going to allow in order to deliver for what women need at each stage of their life. I think there is real opportunity for multiproduct offerings that are delivered through digital platforms. We have talked about savings. Talked about credit products. Talked about insurance. That could be Health Insurance products, it could be agricultural insurance products. All of those that can be delivered for a woman to address her needs for convenience, security, and confidentiality. We have the opportunity now. And so it is a matter of investment by the Financial Institutions and mnos to think through this. It is the Donor Community saying, ok, if we are going to be investing in certain projects, they need to take into account the needs of women. Of course, it is the Regulatory Community and, you know, we have used the term game changer before in terms of digital, but i would argue that the regulators have a Game Changing role right now. About what isink best for their entire population, there is going to be huge improvement in Economic Empowerment of all of the citizens in their countries. Mr. Donnan we were close with you before we go to the floor. What was the cool new Financial Inclusion product you are thinking about at 6 00 a. M. At penn station this morning . Mr. Wald i cannot predict what will be the next big Financial Inclusion, but i can predict where it is going to come from. It is going to come from one of the countries that were surveyed in this report. One of the important parts of our work is soliciting Knowledge Exchange between government. And when they come to ask and ask us what others are doing, they are not asking us to know what is the u. S. Or germany doing, they want to know what other countries that are [indiscernible] and i think that is where the big next innovation will come from because this is where innovation is now happening because of all you know because technology is now erupting and responding to needs that have been there for a while. Suddenly, there is the search on the one hand of new innovation, but also government leadership that is trying to facilitate that happening. And with the incredible spirit of art leadership of entrepreneurship, im sure that is where it is going to happen. Mr. Donnan great. Well, lets open it up to the floor. If you could put your hands up. If i could ask you to kind of limit it to questions, to be snappy and quick and to the point. And also to let me know which member of the panel you would like to direct it to. Of course, to introduce yourself. Well take these questions in and kind of groups of three. So, why dont we we have a big cluster here in the front. What we start with the lady in the second row here. Thank you. I would like to address my question, my question, not a comment. It goes to the issue that both and loretta and leora dealing with new Payment Methods and Financial Inclusion, primarily. And that is, when i hear you talking about the Digital Financial sector, you are primarily talking about, it seems to me, the mobile technology and the rails. And i am wondering to what extent you are also working with governments or conceptualizing the notion of digital identification as an integral component of the Digital Financial sector . And when you talk about india, for instance, it is my understanding that the biometric Identification System was a crucial component of the Financial Inclusion efforts across the different government that have come into place. This is not just a new Financial Inclusion initiative. That it was revived in part because of the new emphasis on Financial Inclusion. Ora is talking about sort of payment histories, for instance either receiving payment from an employer or government payments those are Digital Identity point that can as, in part, identifiers to build up an identity so that the government, when it makes payments, for instance, in the digital landscape, knows who it is giving it to any Financial Institution is also able to. Im a little concerned about to separation there is of the issue of Digital Identity and know your customer. With loretta very articulately express a view that that was an integral am component component. Mr. Donnan ok, Digital Identity, which is a question in the news. [indiscernible] thank you. Carefully and i thought it was correct. I think we have to return to the report a little bit and the notion that i want to return to is the notion of inclusion, access, and use. We havent heard much at the panel level about how can we aim improve use . Because even though we say 32 of people use a mobile product or mobile account once in three months, it means that a lot of people dont. And we have registered them. So the question for me is, what would you contribute to this sort of improvement in use that we need . We havent heard much. And what we also havent heard much of is actually the customer. Acept karen came in with specific customer group. Than what we also havent heard much of his the people [indiscernible] the financial Service Providers. If we could just get a few remarks from the whole panel or one person on that. Thanks. Mr. Donnan ok. And behind you, oh, just beyond the row there. [indiscernible] we will get you in the next round. I am off from the [indiscernible] you can predict im going to ask about Consumer Protection. And so i would just like to when i look at the report, i see that several of the countries that scored very well actually are very poor and Consumer Protection. So just to comment on what needs to happen, what do you see that is happening and what does need to happen in that area . Mr. Donnan ok. What are we start with you and this question of digital identities. I am not an expert in this issue. I just want to say there is an alliance. We dont prescribe digital Financial Services solutions. We dont tell government you should use this of that. And what we have seen is that working with government and others is that there are Different Solutions that work for different contexts with different majestic goal or infrastructure. In some cases, that is what works. In other cases, there are other solutions. You mentioned the mobile connection services. There is definitely but there are also other solutions that are working very well in other contexts in other countries. Definitely there is the issue that im sure loretta could address better, but there doesnt have to be limited to necessarily mobile solutions out there. Mr. Donnan jerry, do you want to jump in on this question echo im struck by one of the things question . I am struck by one of the things that came up, the regulatory barriers or was it you who mentioned it the need for an id to get a simcoe in some countries. To get a simcoe hard in some countries sim card in some countries. Mr. Grossman i think it is a real challenge. The issue in general, which i think its probably the best thing to talk about, is a real challenge because you have a balancing act and beretta talked about it earlier in terms of the riskbased approach. And i want to emphasize that back in 2012, they changed from recommending or allowing a riskbased approach to mandating a riskbased approach. They said not only is it something you should do, it is something you must do. You have to look at the different risks with in your country, within the Financial Sector. Different types of providers, different types of products, different types of customers. And you need to develop a riskbased approach. One by doing that can you dedicate different resources to different types of risk based on the actual risks that are present there. So the question is, how do develop a riskbased and proportional kyc framework so that you mitigate the major risks while also not unintentionally preventing low income people who want to use basic accounts from accessing the formal Financial Sector . This gives me a chance for a shameless plug because we just published a new report, a technical paper, on proportional kyc. And it addresses the specific issue in the context of how regulators and assessors can try to address a great proportional antiMoney Laundering and counting the terrorism frameworks. I am a coauthor for disclosure. Happy to talk about it more. But i think if you have a look at the report, i am happy to discuss it further. Mr. Donnan loretta . Ms. Michaels just to add to that. Everybody looks at india over the past two years and they think that is the answer. The reality is that every country has multiple forms of ids already in existence. Some of them digitized, some of them not. I was speaking with the world guy who is going to put out a w d are shortly and i think you mentioned that there are 76 , i apologize, i cant remember already have some sort of digital id. The problem that you find in a lot of countries is that you have multiple ids that no one has access to. Rolls, schoolrs registries, municipal residency registries. And oddities dont provide electronic access or they just dont provide access to anyone. Until you have financial Service Providers that want to be able to use this information for their own ky seat purposes kyc purposes, but they dont have access. So that comes back to the court a nation needed. To thisan lets go question of how you can improve use. I am struck by the dormancy rates that you see in a lot of countries. Ms. Klapper i think we touched on some of the larger ones. Encouraging payments. And encouraging the sending. Globally, according to the index, there are over half a billion account holders [indiscernible] this is simply low hanging fruit that hopefully the market will replenish. And encouraging merchants acceptance of payment. It is one thing to say, oh, i never thought about that. But when you ask any merchant, they say, i am not formalizing anything. Tax record,ectronic the authorities will be on my doorstep tomorrow. Even the surveys of small merchants, 70 report i do my accounting in my head. Who knows how many different books they have, but this is a tremendous challenge globally. And i think it is also really critical to expanding figuring out how to encourage merchants, you know, who are often relatively acting relatively informatively informally to accept payment. Mr. Donnan do you want to jump in . Ms. Miller thank you for asking that question. In response to also what leora just said, that usage through the lens of Digital Payments but when we think about the broader set the financial products, whether they are delivered via digital channel are not, how do we increase that usage . And i think one of the elements that, you know, we certainly need to look at is what is the corresponding Financial Education and consumer marketing that goes along with a product . So, when it is a savings account, how do you encourage the hitter and educate. Encourage behavior and educate . If i put in a certain model of money every week, im going to be able to save for my children possible school fees fees ors school wedding in a few years. How do you encourage that usage to drive the behavior and and what is want going to be beneficial for the client echo so i think client . So i do think we need to look at the education element. And also, we certainly find this when it comes to women, is how a product is actually marketed. We are working on an insurance product in morocco right now. It was a very good, well designed Health Insurance product. And when we went in to do the Market Research with clients and we started to describe the products, everyones eyes without them they were, like, that would be amazing. And we said, well, you do have a product already just like that. But because the consumer education, the marketing of the uct were so complicated and we all know when youre talking about insurance, it is very complicated but basically taking a step back and revising how that product was communicated to clients has increased the claims for that product significantly. Once again, sometimes it is just some of the tweaks that you need to make in order to increase usage. Jerry, do you want to jump in . And lets pivot a little bit to the question of Consumer Protection. Sure. Mr. Grossman sure. First on how to improve usage. First of all, i think you need a that is useful to the people have the product. If you just focus on getting someone a bank account but it is not an account they can use, then what type of Financial Inclusion are we really talking about. If you have to travel a long way to access the account, if there is monthly fees, people are not going to want to use that account and it is likely that it will remain dormant. So functionality is a big part of that. And all the folks at sea gap are looking at the design. And i think that is a really important part of it, as well. And working with the financial Service Providers to develop products that meet the actual needs of the on bank and underserved unbanked and underserved. I know this is often an issue that is treated from the perspective of regulators only. And i certainly believe that regulators have a very Important Role to play with respect to Consumer Protection. But i would like to talk about something that they gsma is doing in this state. In november of laughter, they launched the code of conduct. And it was endorsed by all the Major Mobile Network Operator groups that were providing mobile money services. So when you think about vodafone, orange, although of them have endorsed this initiative. The code of conduct itself is a set of eight highlevel principles of which several of them are specifically focused on protection. Is in regards to safeguarding funds. The last three issues are all very Consumer Protection specific. Focusing on disclosure, transparency with respect to fees, terms, and conditions, teaching people how to use financial Conditions Services safely. Of the that is one things that we are focusing on in the code of conduct. Dispute resolution is another issue that we address and the code of conduct. And another issue is data privacy. How do we ensure the customers understand how their data is used and how do we ensure that mobile money providers get the consent of users before they use their data, their personal information . So this is an industry led effort that complements and doesnt substitute for initiatives in particular countries, but i think it is a very Important Initiative and it was a very promising sign that all the major money groups are have endorsed this. Mr. Donnan loretta, do you want to jump in on this deco you are mentioning in your opening this . You are mentioning in your opening remarks ms. Michaels absolutely. With the advent of new types of plays, there needs to be a new look at how those those players are operating and how their funds are protected, etc. The one i mentioned earlier was the issue of deposit insurance for Digital Payment providers. And that is one of many areas basel onlators from down are looking at these issues. And then as jerry said, there is the whole aspect of what is the Service Provider required for in terms of fee transparency, recourse, easier ability to reverse a transaction, and that sort of thing. And these are all areas that the gsma communities in developing countries and in emerging markets. The second one is, when you have such positive outlooks and a lot of profit to be made, usually you have offshoots. Especially nowadays when you have the opportunity to be more of an entrepreneur, you have more technology to kind of create a banking payment and especially when you go into communities when people dont trust her and create all of this, they are going to start using your services. That is,estion with what advice would you give to policy makers and regulators, keeping in mind this is not necessarily the capacity of implementation, but what advice would you give them concerning offshoots that could potentially harm communities instead of help them in emerging markets . Thank you. Mr. Donnan ok. Right next door . Thank you. I am a lawyer and consultant to the imf and will bank on policy and legal reform. Starting with the 30,000 foot view, the biggest problem of development is governance. And probably one of the two Biggest Challenges in governance is corruption. And most of the resulting countries are pretty corrupt. Are any of your organizations doing any work in the scope of Digital Payment for combating corruption . It seems when you have indelible records, you can trace payments. That could go a long ways. Thank you. Financial inclusion [indiscernible] and all the way in the back, we had two questions are there. Or was it just one . John nelson. I am also the chairman of the National Disabilities institute. I want to talk about ask about people with disabilities included in the data. Both the fdic and have recently released some data about the situation. I wondered if anybody could speak to it, and specifically loretta about domestic activities about people with disabilities being unbanked or under banked . Mr. Donnan ok. Was there another question back there . Will come back to in the next round. Lets weekly run through those should we start with corruption . Loretta, you want to start with that . Ms. Michaels [laughter] suppose you will be a better responder for this, but absolutely, with their ability to be traced just completely changes the game for corruption. I mean, one of the early projects that i worked on was in afghanistan, helping to set up a mobile money Payment System for the Afghan National police. Because they were getting, you know, shipped out in Cash Payments shipped out in cash. And of course, easily one third to one half of their salaries were ending up in the pockets of their commanders. So to suddenly be getting this full amount via their mobile money account was a complete shock to the soldiers. Not to mention their commanders. That was a bit of a problem. So, without a doubt, you know, the services go a long ways in addressing issues of corruption. Also in reducing ghost accounts. Whether those be salary accounts or subsidy accounts. But, you know, like everything, i mean, yes, these new technologies go a long way in addressing these problems. Fixing the problems, or at least providing a means to fix them. Know,l innovations, you make their own way. There are people, Border Guards and kenya, demanding their pay via [indiscernible] so people will rise to the level of innovation however they can at the moment. That is just the way it is. Concur thats, i can a lot of governments are interested in digitizing eliminates a means to corruption. I think one of the most interesting benefits, not only sort of at the macro level for a government to see that they have been able to save 1 billion or 2 billion by digitizing payments is actually enhancing or improving the expense of individuals on a daily basis. If you are arrested or you are cited by a policeman and suddenly you dont have to pay them immediately on the spot but could actually than pay the your fine via digital means to the government directly, then that reduces the incentive for the policeman to ask you for the fine on the spot and put it in their pocket. The other issue is we have seen Research Done by the world bank and others is that as soon as you receive your payment directly to your account, you are not subject to request the bride by the person managing your Cash Transfer. And so there is not a clerk would say, well i would give you your Cash Transfer if you give me a small percentage out of it because you get that directly into your account and you dont have to negotiate your way to get what you what you deserve. But also, the government doesnt see complaints anymore because the recipient did not receive the full amount they were due to. Mr. Donnan leora, do you want to talk about inclusion and inclusion of people with disabilities . And also this microfinance example. How do you make sure this helps communities rather than hurts them . The disabilities side, there is huge importance in the work and research we have been doing. It is of specific interest. Unfortunately, at least with this data, the methodology is we add on the questions to the preexisting surveys, which is relatively short and does not have robust enough questions on disability. We actually tried one sort of question, are you able to do physical activities of people your age should be able to do. But we simply dont have the data. But i certainly agree that that is important to explore. Opportunities to make money, and also bring that question back to Consumer Protection questions, something that keeps coming up, often the first question is there is tremendous concern and some of my colleagues can talk about it mobile credit offerings. How people are going to make money off of this. This is certainly one way quick way where people get on their mobile phones, and all the have to do is click to get the credit and suddenly they are indebted. And people may not understand the terms and conditions. Again, it goes back to just the general right of butter and also, i would even take your comment a step further. And encourage the authors to in the next round to explore in greater detail the Consumer Protection framework around particularly these new technologies and new products and just make sure, you know, we need both on the regulatory side understanding who is offering these products and how. And from the consumer side, to make sure there is transparency and disclosure and appropriate recourse in the case of trouble. Mr. Donnan jerry or karen, do you want to jump in . Ms. Miller i will jump in on the microfinance and how we are starting to work with more and more types of players as we have discussed today. A perfect example of this is we started work a couple years ago with diamond bank in nigeria, i very large commercial bank. And they wanted they were interested in serving the 56 nigerians, andd they did have an interest in, oh, what does that mean for women clients . We never thought about women clients before. But in order for them to invest in that market, they required a twoyear payback. Payback period so that whatever investment was made, they can make money in two years. Standard procedure there. And they werent sure this was going to happen with developing a savings product for an entirely new segment they hadnt worked in before. So, when his world banking brought in womens world banking but in some philanthropic capital to invest in that upfront Market Research part and early Product Design, which then helped launch the savings product for diamond bank. And what has now happened is that now the product has been out for two years and it is a savings account that is opened up with a mobile phone, there is a field agent that goes into the open field agent by going to the open and markets, it takes a few minutes to open the account, and they have now seen through the behavior that this is a very viable market segment. So now diamond bank is investing millions of their own dollars and broadening the in broadening the Value Proposition for the unbanked segment in nigeria. Commitment savings products, a youth savings Value Proposition, sometimes when we think about the ecosystem and the different players involved to make this work for all parties, we, you know, the Donor Community plays a Critical Role and the commercial bank plays that role. And in the end, the client is going to benefit. So i think it is a really exciting opportunity bringing all these different players together. Mr. Donnan jerry, the last word . Mr. Grossman just two quick comments. On combating corruption, one topic we have not discussed much today is small holder farmers. Before i joined, i looked at this context and the topic of financial Digital Services in nigeria. And nigeria overhauled its fertilizer subsidy delivery program. And the digitized it did and they found that they were and they found that they were able to get huge increases in the number of farmers who actually received fertilizer because they created a digital system that didnt eliminate corruption, but dramatically reduce the opportunities for corruption. So there are many different sectors beyond salary payments. There is a real opportunity there. Quickly, on the issue of quick access to highcost credit, i think that that is something we need to take a look at. It is an issue anywhere in the world. In the united states, access to payday loans is a very big issue. If you roll it over over time. I think the transparency and disclosure are key. And i think these things need to be monitored so he makes of these benefits succeed the negative elements. Mr. Donnan well, thank your very much. I think, unfortunately, we have run out of time. We could spend the rest of the day discussing it, im sure. The panelists will be here for a few minutes after the panel if you do have some questions. Im sure they would be open to addressing them. But it is thank you very much for being with us. And you had some yes, i just want to thank sean. A great job of modeling moderating the panel. And we really appreciate all the insides you offered. Insights you offered. We certainly appreciate that. Anyone else who has suggestions in terms of our future reports, what we should be looking at, maybe things that we might have neglected in the first round, feel free to email us. Forward to hearing your reaction. Thank you very much for coming out. [applause] [indistinct chatter] [captions Copyright National cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [indistinct chatter] [indistinct chatter] announcer if you missed any of this discussion this morning, you will be able to watch it all on our website, cspan. Org. Check the cspan video library. You may or may not be aware of an incident that took place this morning in southern virginia, or a gunman shot three people on the air, killed them during a live broadcast. It was a reporter and a cameraman in roanoke, virginia. And a guest was being interviewed. You see their pictures on the screen. Alison parker and ellen ward adam ward both died on the screen. On the scene. Congressional representatives for the state, and those districts affected, have reacted on twitter. Senator mark warner says, just heart wrenching. But our with loved ones and im sorry, friends of allison and adam, first responders, and wdbj family. And senator tim kaine, heartbroken by senseless tragedy in moneta this morning. Also, this from congressman robert hunt. We also pray for the recovery of vicki gardner. She was the guest. Our thoughts are with her family and colleagues. And this, deeply saddened by the horrific act of violence in a franklin county. Our prayers are with the families of allison and adam. 29 marks theust 10th anniversary of Hurricane Katrina, one of the five deadly storms in u. S. History. Tonight at 8 00, cspans tour in a louisiana. You cant describe it. That is your whole life gone. Completely. Not only are house, but your whole community. All your friends, your family, everybody is gone. Now a year later, and you still your family and friends you dont see anymore. Hell of a feeling. You dont forget it. You will never forget the rest of your life. Announcer follett at 9 00 by a town hall meeting. All the issues stay at level, federal level, and all other levels. I voted for you. To represent me on the local level. I dont know where else to go. I dont know what else to do. Announcer thursday night starting at 8 00, more from the atlantic conference with femas crank seagate and more. At 9 00, we will show you president obamas trip to the region. Hurricane katrina anniversary coverage all this week on cspan. Cspan is spending much of this week looking at the impact of Hurricane Katrina 10 years ago this week and how communities ever covered. Up next, a cspan documentary created after the hurricane struck the gulf coast, displacing nearly one Million People and killing almost 200,000 2000. [singing] louisianaoing down to [singing] shame of it. He this is america. We have several hundred sites across the state about 120 or so in the new orleans area. This is basically the reality that katrina was an enormous, very powerful storm. And as it overwhelmed the system, what katrina has done is cause a cultural desperate. Diaspora. This is still almost like a ghost town here. What am i going to do [singing] announcer the city of new orleans, when youre after katrina, is now home to less than 50 of its population prior to the storm. A cspan video journalist traveled there in august to take a look at Recovery Efforts in communities were some of the worst flooding occurred. The lower ninth ward, the gentilly district, and the lakeview district. We talked with local citizens and federal Government Agency officials about what is being done when youre after katrina. Ially have should really have should have gone out of town at some point. A lot of the psychologists were recommending, you need to get out of town. Just like once a month. Take a weekend. Youve got to get away from this. This is really bad for your stress level. Announcer we start our program with sue. With an organization that is working on preserving restoring new Orleans Historical district. We are in the seventh ward. It sue we are in the seventh ward. It is not strictly by itself a historic district, even though there are Historic Homes here. This is where we are at a year after the storm. How much flood damage did this get . Sue people got i would say street level eight or nine feet. I would say inside homes, or