More than eighty senior officials from around the world, including governors and deputy governors of central banks, financial sector supervisors/regulators, representatives from the US Treasury, the IMF, the WBG, NGOs, and various other international development agencies attended Toronto Centre’s Executive Panel at the IMF-World Bank Annual Meetings on October 13, 2017.
The panel was introduced by the Honourable Marie-Claude Bibeau, Canada’s Minister of International Development and La Francophonie. In her opening remarks she emphasized that, while FinTech can be transformative, its benefits will not be fully realized if we cannot provide the necessary building blocks for foundation which include financial literacy and identity. Minister Bibeau also highlighted some of the initiatives set out in Canada’s new Feminist International Assistance Policy, such as Women’s Voice and Leadership Program: This program will allocate $150 million over five years to respond to needs of local women’s organizations in developing countries that are working to advance the rights of women and girls and promote gender equality.
The senior guest speaker, Mr. Masamichi Kono, Deputy Secretary General, OECD, focused on the importance of appropriate financial regulation and consumer protection, which should be complemented by access to high quality information, education and guidance to financial inclusion. He noted that there is a vital role for governments, financial regulators and international organizations to ensure the economic empowerment of women.
The discussion was skillfully moderated by Ms. Diane Jacovella, Canada’s Deputy Minister of International Development, who kept the panelists and the audience fully engaged. As part of her opening remarks, Ms. Jacovella emphasized how FinTech can promote financial inclusion and gender equality, and the importance of how to tackle this complex balancing act.
Five distinguished panelists discussed the implications of FinTech in promoting financial inclusion and gender equality as well as the role of financial regulators/supervisors, governments, international institutions and agencies, private sector participants, researchers, and other stakeholders. Highlights include:
Cecilia Skingsley, Deputy Governor, Sveriges Riksbank (Central Bank of Sweden), noted that FinTech is shaking up the traditional banking system. She mentioned that technological breakthroughs give people choices, that technology feeds transparency and in turn, transparency facilitates accountability. She also highlighted the importance of having access to safe and efficient payment methods, and for women, in particular. She provided an example from Sweden, where banks joined forces to establish person to person transactions, 24/7, and across banks; the central bank’s role in settlement of these payments is crucial. Public sector officials should be able to “walk the talk” and be aware of high entry barriers and network effects. Once transparency is achieved, adding on various services become easier, either through FinTech or in traditional ways.
Ceyla Pazarbaşioğlu, Senior Director, Finance & Markets Global Practice, World Bank Group and Board Member, Toronto Centre, noted that technology brings a lot of opportunities. Major achievement includes empowering women through digital technology, and through mobile phones in particular. However, there are still barriers, including legal and cultural, to technology. Ms. Pazarbasioglu highlighted some initiatives by the World Bank Group and provided specific country examples. She underscored the importance of having gender-disaggregated data in order to understand and monitor the gender gap in finance.
Martin Čihák, Advisor and Unit Chief, Monetary and Capital Markets Department, IMF, elaborated on the challenges that Fintech poses to financial stability, and how financial stability and financial inclusion needs to go hand in hand. He talked about the IMF’s analysis of the macroeconomic implications of FinTech, and referred to some recent IMF publications as well as a recent study by the US Federal Reserve. Mr. Čihák noted how data shows that FinTech can help financial inclusion and gender equality, but that there are also constraints. He mentioned the importance of the capacity building programs for financial sector regulators and supervisors, which help mitigate the potential risks. Mr. Čihák also highlighted the importance of obtaining more gender-disaggregated data to support better analysis as well as to improve the ways that data is collected.
Mary Ellen Iskenderian, President and CEO, Women’s World Banking, spoke to the difficulties women face in using financial services. She noted that FinTech offers great potential in terms of its ability to track transactions and develop credit history, which will help remove the main obstacles to women’s access to finance, for example, collateral issues. Ms. Iskenderian highlighted the behavioral aspects of women’s involvement with finance, and said that even though having access to technology is tremendously important, we cannot assume that a woman is financially included if she has bank account and a cell phone. She underscored the importance of financial education as well as collecting gender-disaggregated data for a better understanding of the issues.
Lindsay Wallace, Director, Mastercard Foundation, noted that smartphone penetration is her organization’s area of focus in their work in Sub-Saharan Africa region. She emphasized that FinTech is a game changer in terms of knowing your customer and building digital footprints. Ms. Wallace mentioned how Mastercard Foundation’s partnership in the DRC with IFC and FINCA has shown that females perform better than their male counterparts. She also touched on the importance of female leadership in FinTech space. Ms. Wallace gave the example of female leadership at the IMF, which has helped to strengthen the discussion of gender equality. The same holds true for Fintech organizations. MasterCard Foundation’s scan of FinTech companies in Ghana found that only 20% were founded by women. She highlighted how FinTech can act as an entry point for women to enter male dominated industries, and to grow a business that generates income for the family. Improving the gender balance in FinTech is also critical to developing solutions, technological and otherwise, that reflect the needs of a broader set of users, including women.
Dr. Patrick N. Njoroge, Governor, Central Bank of Kenya, delivered sobering closing remarks. He noted that Minister Bibeau’s leading comments were “phenomenal”, and that he was impressed with Canada’s leadership on emphasizing the empowerment of women and girls in development assistance. Using real life experience of women entrepreneurs in vegetable markets, he mentioned that FinTech is transforming woman’s ability to save, and how Kenya is at the forefront of mobile money transactions. Dr. Njoroge highlighted how FinTech has huge potential, but we need to look at it in a systematic way. In this regard, he gave an example of a women’s access to insurance products in case of illness. He mentioned that there are many factors that drive gender gap as identified by the panelists, however, FinTech has the possibility of overcoming these hurdles. He also mentioned that Kenya has made some progress on women’s access to finance as indicated by the panelists, however, there is still a lot to be done and, in Central Bank of Kenya’s strategic plan, a key element will be connecting FinTech with women.
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