BRIEF September 26, 2017

Financial Inclusion Global Initiative (FIGI)

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The Financial Inclusion Global Initiative (FIGI) is a three-year program funded by the Bill & Melinda Gates Foundation (BMGF) to support and accelerate the implementation of country-led reform actions to meet national financial inclusion targets, and ultimately the global ‘Universal Financial Access 2020’ goal.  

Financial inclusion is a critical enabler for poverty reduction and inclusive growth. Access to transaction accounts opens up a pathway to broader financial inclusion, whereby people and firms can make financial transactions more efficiently and safely, access funds (whether payments, credit, savings, or other) invest in the future, and cope with economic shocks. Access to transaction accounts also enables participation in the digital economy, and is a critical building block for digital development too.

FIGI is a collaborative initiative among the World Bank Group, the BMGF, the Committee on Payments and Market Infrastructures (CPMI), and the International Telecommunications Union (ITU) with broad participation from public and private sector partners in its activities.

Together these organizations galvanize the work of the CPMI-World Bank Group Task Force on the Payment Aspects of Financial Inclusion (PAFI), the BMGF’s Level One Project, and the ITU Focus Group – Digital Financial Services, to deliver implementation solutions, deep topical analyses and practical investigations, working toward the goal of Universal Financial Access by 2020.

FIGI will enable national authorities in developing and emerging markets to better utilize the potential of digital technologies for financial inclusion, and to manage associated risks. The design of country programs will be informed by the PAFI framework and guiding principles, which were developed by a task force of financial regulators chaired by the World Bank and CPMI, by the recommendations of the ITU Focus Group on Digital Financial Services, and by the BMGF’s Level One Project principles.

In particular, FIGI funds national implementations in three countries – China, Egypt and Mexico; supports working groups to tackle three sets of outstanding challenges for reaching universal financial access: (1) electronic payment acceptance, (2) digital ID for financial services, and (3) security; and hosts three annual symposia to gather national authorities, the private sector, and the engaged public on relevant topics and to share emerging insights from the working groups and country programs.


Background

FIGI Working Groups on Digital Financial Services will develop knowledge, technical tools, and policy recommendations on the following three areas: Security, Infrastructure and Trust, Digital ID for Financial Services, and Electronic Payments Acceptance.

  • Security, Infrastructure and Trust Working Group:  The main objective is to identify effective mitigation strategies and measures to address the changing threats and vulnerabilities landscape in the DFS ecosystem in order to preserve confidentiality of information, integrity of transactions and availability of the service. The work of the group will encompass the following areas: address communications infrastructure vulnerabilities (e.g. SS7 security), application security testing, interoperable authentication technologies, security of distributed ledger technologies and use cases for financial inclusion, monitoring the quality of service of the network and quality of experience for DFS and digital fraud schemes and security risks of emerging technologies. The group will also include a work stream on cybersecurity to support financial sector authorities to better understand the threats, targets, risks and impacts of cyberattacks, and to deploy adequate tools to increase cybersecurity.
  • Digital ID for Financial Services Working Group: The main objective is to identify and accelerate the use of digital identification for expanding access to, and improving uptake of, financial services. The group explores the following promising areas, among others: reducing the cost of onboarding and providing transaction accounts and other financial services to individuals and MSMEs; the use of IDs to facilitate Government to Person (G2P) payments and merchant payments; and usage of IDs to establish an authentication framework for transactions and giving consent. The group complements and is closely linked to the Identification for Development (ID4D) initiative of the World Bank Group.
  • Electronic Payments Acceptance Working Group: The main objective is to foster effective practices for enabling and encouraging acceptance and use of electronic payments, with an emphasis on person-to-business (P2B) payments, both for proximity payments at the point of interaction and e-commerce, and on unserved and underserved groups. The work of the group encompasses the following areas: pricing and incentives, use of data generated by an individual or firm’s payment activity, technological and process innovation, and intermediaries. Each work stream will aim to enhance the understanding of its theme and potentially provide guidance to regulators.

FIGI Country Programs

Comprehensive country programs of technical assistance will be developed and provided to national authorities through country programs led by the World Bank Group, with inputs from the International Telecommunications Union. The three countries for which comprehensive programs of technical assistance will be designed are Egypt, Mexico, and China. 

FIGI country programs will provide tailored support including: diagnostic assessments, advisory services, technical assistance, capacity building, and pilots of innovative approaches, relevant to digital financial inclusion, with a focus on improving the legal and regulatory framework and financial markets infrastructure. ITU will provide technical advice on ICT regulation and supervision, and network standards, relevant for DFS.

The country programs will also cover drivers of financial inclusion to reach universal financial access: financial product design (including digital payments and other financial services), financial literacy and awareness, diversifying access points, and leveraging large-volume, recurring payment streams.

FIGI country programs will be closely coordinated with the FIGI Working Groups to bring innovative approaches, best practices, toolkits and policy recommendations developed by the working groups to the country implementation programs to be considered by the country authorities for piloting and implementation. Learnings and progress will be reported during the Global FIGI Symposia.

FIGI SYMPOSIA

The FIGI Symposium will be held on an annual basis between 2017-2020 in order to provide a forum for dialogue between regulators from telecom and financial services, DFS providers and all concerned stakeholders, and to share their experience and views on the main challenges to be addressed for scaling up DFS. 

The main objectives of the Symposium are to:

  • Provide a unique platform for regulators, policymakers and DFS experts to share lessons learned about the different digital financial models and services, the regulatory sandbox approach, ways to mitigate risks in fast changing ICT and digital payment environments, and the impact of emerging technologies on the ecosystem;
  • Showcase digital financial inclusion initiatives and innovations taking place at the international level; and
  • Provide thought leadership on digital financial inclusion strategies and technological innovations in the area of DFS.

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