Thursday, Dec 02, 2021

Perspectives on How Regulators Use Sex-Disaggregated Data and RegTech to Enhance Financial Inclusion

The authors of TC’s recent report share the perspectives and insights they have gained from the research and analysis they conducted. They share their views and recommendations about the role regulators and RegTech can play to expand financial inclusion of women.

 

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Speaker 1: You're listening to a Toronto Center podcast. Welcome. The goal of TC podcast is to spread the knowledge and accumulated experience of global leaders, experts, and world renowned specialists in financial supervision and regulation. In each episode, we'll delve into some of today's most pressing issues as it relates to financial supervision and regulation; the financial crisis, climate change, financial inclusion, FinTech, and much more. Enjoy this episode.

Anatol Monid: Greetings. Good day. Good afternoon. Good evening. Thank you for joining us for our webinar with the authors and researchers on How Regulators Use Sex-disaggregated Data and Regtech to Enhance Financial Inclusion. We appreciate the support of Toronto Center's Gender Community of Practice to deliver this, in particular, the community practice facilitator, [inaudible 00:01:11], for accommodating us on this session. We also thank our funders, Global Affairs Canada, the Swedish International Development and Cooperation Agency, and the International Monetary Fund, and in direct support of this work, the United States Agency for International Development.

Our panelists are well qualified to speak to you today and in this order. They all researched and contributed to the publication of the paper. Their files were previously provided, but just let me remind you that as Toronto Center Program leaders, Petronella Chigara-Dhitima is also the managing director of the Mustard Seed Advisory. Ernesto Brodersohn is a independent supervisor and regulatory consultant. And Jennifer Long is also an independent supervisory and regulatory consultant, and we were happy to have them work with us on this program.

Our objective today is to give you access to those authors, and their research, and their perspectives on the work that we did. Our objective of the study was to examine across two regions, two continents; South America and Africa, how supervisors are using data and regulatory technology to supervise financial inclusion and to support female financial empowerment. The report was developed through a number of techniques, including questionnaires, in-person interviews with the regulators in financial services providers. And so, we bring you the views of our authors as panelists. If you have questions you would like to hear from them directly, either generally or specifically, please post your questions in the Q&A section. We are monitoring those. The panelists will provide a short opening and Petronella will lead us off. You're on mute, Petronella.

Petronella Chigara-Dhitima: Sorry. I was on mute. Good day to you all. And thank you for attending this webinar. Thanks, Anatol. I'm going to talk briefly about the reflections that we had on gender and financial inclusion in terms of what's the current status, what are we seeing, what did we see in the pilot countries, the countries that we were studying. And it was very clear to us that regulators are using... They are getting some kind of sex-disaggregated data, and this information is showing them that the gender gap still exists. So, the awareness is really there. Most supervisory authorities are aware that there is a gender gap in terms of access to finance.

There are a number of steps that regulators are taking in order to address the gender gap. I mean, things like licensing of non-bank FSPs. That's something that we know has been happening and it's been going on for quite some time, and that's an effort to address the same issue. Issues around KYC light in a number of countries, this was already in place. The countries that we studied and financial literacy programs were ongoing, mostly targeting excluded groups, especially women.

So, there is high awareness, but I guess the big issue is that we didn't really see a strategic positioning in terms of placing this as kind of the key issue that's being addressed. And that's understandable given where most of the supervisory authorities are. They are conflicting priorities. There's a lot of things that they need to be working on, and because of that, maybe this issue is not really taking center stage as it should be. We can go to the next slide. Next slide, Anatol.

So, looking at what regulators can do. We had a few examples, and we'll probably about this during the Q&A, but really, I think the big issue is for the financial services markets, there is need for the regulators to walk the talk to lead by example, to really demonstrate to all FSPs that when we're talking about gender and inclusion... When we're talking about women inclusion, what does it mean? So, somebody has to kind of role model this, especially for the financial services providers, the financial institutions. And gender mainstreaming has to... It probably has to become a key responsibility. We noted that in all the countries, gender responsibility was kind of... Mainstreaming gender was sort of spread across a lot of institutions, but maybe not as pronounced when it comes to financial supervisory authorities as a key responsibility. So, that's an area that regulators could do something about.

And lastly, we can move on to the last slide. Just talking again about what is it that can be done. The last part. So, two other things. Issues to do with strategically positioning the gender issues within the supervisory mandate, within the supervisor remit, and that will also mean that as supervisory authorities, they need to actually demonstrate and show it within the central bank itself or whatever financial supervisory authority it is. And to really see that... Focusing on sex-disaggregated data is actually one of the ways in which... Because across all four countries, there was an acknowledgement or... I mean, supervisors had already embarked on risk-based supervision and sex-disaggregated data can actually be a tool that helps you to fulfill that or to implement that without... It's actually part of it because then once you have the sex-disaggregated data, you can actually profile where is the risk concentrated? Is it the males, the females, is it different age groups? So, we believe that there is already foundations, but I think there is a little bit more that needs to be done. And those two are the last key points that regulators can actually embark on, and I'll turn it over to Ernesto.

Ernesto Brodersohn: Thank you.

Petronella Chigara-Dhitima: Over to you, Ernesto.

Ernesto Brodersohn: Thank you, Petronella. And I also wanted to thank the Toronto Center for this really interesting project and for my teammates who have been privileged working on this, say, for the past, a little over a year. So, in terms of technology, what we saw on the field when looking at how authorities and FSPs are looking at the technology being used in order to be able to collect sex-disaggregated data, what we saw, in general, is there are obviously supervisors do analyze data more broadly, but the use of sex-disaggregated data is a little bit less common. And where data is available, sometimes the processing of this data is sometimes a little bit more manual than we'd like it to be. And regulators are actually more focused on making sure that there is actually access to the financial services and not so much, perhaps, on the quality of the financial services.

Regulators are actually... They're very much engaged in introducing... Making space for innovation and working towards digital services and such is an example of Innova SFC in Columbia. And while technology may not be a barrier to be able to exploit the sex-disaggregated data, the RegTech can definitely improve that. And from the financial services provider, a couple of the things that we saw, which were interesting were obviously COVID. We did this in the middle of a COVID crisis, and it certainly did accelerate the implementation of digital services. And one of the things that was pointed out both by FSPs and some authorities is that there needs to be some level of a... There is some level of codependency between how much information can be shared from one side to the other and providing a more coherent and developing of technology between both service providers and authorities can be actually beneficial. Finally, there's significant resistance by some cultural gaps. Although, like I said, at the beginning, COVID did help in a little bit of introducing technology in providing digital services. And this digital services do provide a segue into collecting a little bit better information on sex-disaggregated data. Can we go to the next one, Anatol, please?

In terms of the technology, we saw that there is some lacking in some countries on physical infrastructure to be able to enable the extension of coverage, especially to women, but in some cases in more, in general, in terms of financial inclusion. And like we were saying before, the growth in tandem between the finance service providers and the authorities can actually improve over time and it can actually improve better the way data is actually developed and be collected.

Some authorities are focused specifically on specific financial service products, but others are actually looking at different and depending on the integration of the different authorities in different countries. And very much a good segue to that. There are prosecutorial and even sometimes cross-agency communication challenges that would make it a key catalyst so that coming up with a coherent strategy on finding out what level of sex-disaggregated data could actually benefit not only being able to monitor and understand what's going on in the market, but also exchange knowledge and understanding what are some of the gaps that Petronella was mentioning about. The capacity building is key in order to be able to implement SupTech solutions. And if we go to the next one, Anatol.

And as we have seen and in our discussions with different authorities, we have seen that the technology can definitely enhance the collection of quality data to ensure that at least information comes in a much more timely manner, and it becomes more efficient in order to be able to process a lot of this information. SupTech can help regulators inform faster decision on not only on access, but quality of the information that is happening on the financial services. And automating a lot of the processes that exist within the regulators and including technology like artificial intelligence and machine learning can help the regulators be able to be a lot more efficient in processing larger quantities of data and automate processes and identify gaps and like Petronella was mentioning, risks that exist in the market.

The regulator's technology is there. And we think that it may be worthwhile in investing not only in the technology, and to enhance regulator's capacity to improve some of these... To build up on what they already have, but we also think that there could be also a consideration for a non-traditional business models and methods in providing services in technology in, and we have seen some examples of those. Though this is, obviously, not up and coming. And with that, I'll turn it over to Jennifer for other comments. Thank you.

Jennifer Long: Thank you. In this last part of the presentation, I'd like to explore the broader context in which supervisory authorities are working and the roles they can play within that context in promoting women's financial inclusion specifically. And in doing that, I'm going to refer to some of the barriers to change and the enablers of change that we found in the course of our work. So, I'm going to begin by talking about the four bars in pink and gray that you can see across the top of the diagram, which are the foundations that really kind of underpin supervisory authorities' work. And one thing that struck us if we take the top two together, was that although the UN Sustainable Development Goals, which we're familiar with and that very clearly referenced gender equality, are very clear about the need to make progress in this area. The international regulatory standards set by financial services, standard [inaudible 00:15:55], typically don't reference gender really at all. And we thought that this made it harder for supervisory authorities to do so at a national level, both because it's harder for them to see perhaps what good practice would look like, and also because it may be harder to justify allocating resources to work that doesn't appear to be specifically required by the international standards.

On the third bar, we put together national strategies for financial inclusion and development and national legislative mandates for supervisory authorities. And obviously there's no one right answer to what either of those things should be, but we did observe some features that seem to help in terms of enabling progress. The first was that where there is a national financial inclusion strategy, a recognition of the many potential barriers, such as non-financial infrastructure that are really outside the realm of the supervisory authorities to do anything about and across cutting approach within that strategy to addressing those barriers.

The second enabler was an explicit focus in those strategies on gender equality and on specific gender gaps that needed to be addressed. And the third thing we observed is that it's really helpful for supervisors to have an explicit consumer protection and conduct of business mandate. And this is not always the case, particularly, where the supervisory authority is a central bank. And as we'll discuss in a moment, it becomes really increasingly important as markets mature that that mandate is in place. On the fourth bar here, we cover authorities' own activities and capabilities. And I'll just talk quickly about a couple of those.

So, firstly, we already talked about some of the opportunities of technology and one thing that can really help, it's not that easy to do perhaps, but is for an authority to have an overall technology strategy that concentrates or putting in place key infrastructure that can then be used for different aspects of your supervisory activity, including conduct inclusion related activities, and as a channel for getting sex-disaggregated data. And a really helpful place to start that is the infrastructure to automate the reporting of aggregated data from financial services providers, which can be leveraged both for prudential and for conduct purposes, including [inaudible 00:18:19].

And secondly on gender. And this goes back to the point that Petronella was making right at the start about walking the talk. And we saw some really good examples where supervisory authorities are committing themselves to mainstreaming gender in their own activities through mechanisms like staff policies and targets for gender representation in their senior management roles. And some of those are publishing and holding themselves accountable publicly for their progress in that direction. So, with that context in mind, I'll just turn to the bottom of the slide where you see that we've described some of the different roles that supervisors can play to enhance women's financial inclusion in those blue arrows.

And if we start on the left hand side, what we typically saw supervisory authorities starting off by doing when their markets were at an earlier stage of maturity was collecting and analyzing data to help the wider financial inclusion ecosystem to understand the landscape. So, that might then be used to educate potential market participants and set up policies which is a very important activity, but actually not necessarily one that supervisors alone can carry out. There may be other bodies who are at least as well placed to do that, but nevertheless, those are important steps, particularly where the markets are going to stage where most access is through informal financial service providers who are probably outside the regulatory perimeter. But we do think that as formal provision of financial services becomes more common, there's an opportunity for authorities to leverage the other roles that you see on the right-hand side of the diagram to really promote gender equality and behavioral change more directly in financial services providers.

So, in relation to the leader role, this is really about setting a tone from the top and a culture and an expectation in the market that gender and an inclusive approach are important to you and should be important to those that you supervise. And a great thing about this role is that any authority can choose to adopt it, however sophisticated or not your technology is, and also that you can use a small amount of data to have a big impact in this role. So, for example, if you do nothing else, you could set the expectation that your own authority's leadership and that of the financial service providers you supervise should be moving towards balanced gender representation and use sex-disaggregated data to track progress and acquire the FSPs that are lagging behind to take action to catch up.

So, this then links us into the supervisor role, which is a key opportunity to really change behavior on the ground. And we think this is where there are synergies between conduct of business standards and financial inclusion that can help ensure that both women and men are treated fairly when they do access financial services. And in markets where many women may have some formal access to financial services, but perhaps the challenge is then ensuring that they can use those services and get the quality and range of products and services that they need at that point. This becomes really increasingly important. So, we think that this is something that's really worth focusing on as financial markets mature.

Although it isn't the main focus of our report, there's also some evidence that gender balance in senior management in FSPs correlates with better risk management overall, which, of course, is good for prudential supervision as well. This can mean a bit of an adjustment to how we think about the sex-disaggregated data that we need because typically to act on supervisory data, you'll need to be able to look at each financial service provider separately, but again, the good news about this is that it can leverage that same infrastructure that your authority probably already needs and may have in place for prudential data returns.

So, in conclusion, on this slide, I just say that while all of these roles are important, we would really encourage supervisors to think more about how they could use the leadership and supervisory roles alongside the others. And now if we move to the next slide, you'll see some references there to our report and some other resources from Toronto Center, which we can provide you with to find out more, but I'll hand back now to Anatol who's going to lead us into the discussion.

Anatol Monid: Thank you panelists. Your insights are valuable for us, and you've already generated some questions in the Q&A. Although I have some questions for you, let's go right to the audience questions. And Lloyd asks, "Are there any insurance supervisors who indicated that they were receiving sex-disaggregated data? And if so, is this submitted as a regular industry return or on an as per request basis?" So, I know that in Africa we just dealt with central bank supervisors, but in South America, Ernesto and Jennifer, we talked with integrated supervisors in Peru and Columbia. And how were they treating sex-disaggregated data, whether it be for an insurance or other regulated sectors? Jennifer, Ernesto. Jennifer, Ernesto.

Ernesto Brodersohn: So, I think just coming quickly, I think we have seen authorities are collecting sex-disaggregated data in a couple of industries, specific products. And like I was mentioning earlier, their focus is still in specific areas. For instance, credit and general banking information data is collected at the gender level and understanding what is happening in terms of access to those. I must say insurance is probably lagging a little bit behind with respect to other financial services, specifically, with respect to the data that's collected, and that's something that we've seen, but they do recognize. And they do collect some data at a very corporate level, for instance, the directors of different firms who are the gender of those and understanding what happens, but not from the actual field. And yes, with respect with the other industries, yes, the data collection happens on a regular basis and it's submitted on a regular basis. I don't know, Jen, if you wanted to also come in.

Jennifer Long: I think you pretty much covered it actually, Ernesto. I think we saw that really, typically, things tended to start with a more granular information about payments and banking services and less so as we move through into insurance and then into investments and securities products.

Anatol Monid: Okay. Thank you. Kathy has also put a question in there. "What are the implications of these findings for policy dialogue with international standard setters?" And this is for all three of you. "In your views, is this the best place to focus on or promote gender equality?"

Jennifer Long: Can I make a start on that one? So, I was really struck. For me, this was one of the really surprising things when we were doing our work was almost how completely absent gender is when you go through the international standards in this area. Given the prominence that they're given in the UN Sustainable Development Goals, and obviously in many countries on the ground already. So, for me, this was a very surprising sort of gap to be reminded of. And, obviously, I was very familiar with these standards, but I guess I hadn't thought about that gap before. One thing that I was really struck by also is that there are some other regulatory spheres where international standard setters have made commitments to integrate the UN Sustainable Development Goals into their standards. So, for example, if you look at the ISO kind of websites, you see that they are trying to kind of map the connections with the UN Sustainable Development Goals.

So, I recognize that doing that in financial services is not enough by itself to make things happen on the ground. That's kind of the hard work of the people in national authorities that would make a difference, but it does seem to me that some coordinated effort on that part by the international standard setters would help to provide a kind of common core of good practice and help to make the connection with other aspects of supervisors' activities, which could be really helpful because as we alluded to at the beginning, I think we're all very conscious that supervisory authorities have a quite staggering number of things that they're asked to deliver and a lot of different regulatory objectives to try and reconcile. So, we think this could be a really helpful tool to help knit all these things together.

Anatol Monid: Ernesto, Petronella, anything to add?

Petronella Chigara-Dhitima: Maybe I could just add that I totally agree with Jennifer and I think it would just... The way it is right now is sustaining the discord that's there. So, there's talk, but there isn't integration of this from a policy perspective. So, if the international standards are also kind of reinforcing it. You talk about it because I don't think there was any regulator who wasn't aware, so the talk is there, but [inaudible 00:28:55] is not interwoven into the mandate, the standards. So, the regulators kind of talk about it, but they can't quite see it out how it fits into their priorities. So, I totally agree with Jennifer on that.

Anatol Monid: And Ernesto [crosstalk 00:29:10].

Ernesto Brodersohn: Yeah, just to add. I think especially when policy makers, and especially when regulators have distinct specific purposes and specialized in specific industries, either it becomes especially important to coordinate this policy overview with respect to what the supervisors are doing. So, this overarching policy decisions at a country level, they probably do need somebody to coordinate at the [inaudible 00:29:50] level. And sometimes that becomes a little bit less of a mainstream like Petronella and Jennifer were saying, but more of an afterthought and depends sometimes on the scope of the mandate the authorities have with respect to their mission on supervision on specific industries themselves.

Anatol Monid: Okay. Thank you. So, we're continuing to get interesting questions from the audience. So, let's stay with that. [inaudible 00:30:27] [Anerlisa 00:30:27] asks, "Aside from requesting data on gender composition of leadership in FCSs," I'm not sure what that means, "what other specific types of information are requested by bodies with established databases? This will help institutions just starting their sex-disaggregated data." So, let's look at it a couple of ways, the perspective of the financial services entity, who is expecting to be asked about data gender composition in their submissions to financial services authorities and from the authorities' perspective. So, Petronella, do you want to start from the business perspective? You're on mute.

Petronella Chigara-Dhitima: [inaudible 00:31:16]. I keep making this mistake this time round. I will talk about what we found and generally what's supposed to be collected. So, some of what we were finding... So, instead of just collecting data on... So, if we talk about access only, not even about usage. So, if we're talking about access, how many men and women are accessing which kind of financial services, so you're almost looking at a breakdown of... If it's credit, what kind of credit? And you have it broken down by the agenda variables. And if it's a deposit account, if it's fixed deposits, and then paint a picture to see who is accessing which services. You can even move a step further, and this is not what we found, but if you move a step further, you would even go on to say in terms of usage because they can open these accounts, but they don't use them. So, you can even go into usage, which is using what and to what extent. And so, that kind of detailed information, if it's disaggregated by gender... So, it's by product, but it's by gender. Because of the digital wave that's there, you could even go into digital and begin to say, "Who's using which digital products?" Or, "Who's using which payment systems?"

In my country, the regulatory authority is very good at collecting what transactions went through, point of sale, ATMs and what have you, and you can imagine this is a lot of information, but if they had to find a way of disaggregating that by gender and be able to see, "Do we have more women using their mobile phones than using the point of sale devices or the ATMs," it could fit into so many policy implications. Maybe I'll stop there. And Ernesto and Jennifer may want to come in.

Jennifer Long: Yeah. Anatol, now it's your turn to be on mute, but I will pick up anyway, and then hand it over seamlessly to Ernesto afterwards. So, I think from the authority point of view, I think we saw a mix of different approaches, and I guess the levels of data that people were having and I'll explain a bit more why that was in a moment, but the key place to start, I think, is a version of what Petronella was describing for businesses, which is, of the financial service providers' client base, what proportion of those are women? And what products are those women buying? So, a lot of it would be about having a kind of data return where you're asking the FSP to summarize for the regulatory body. A breakdown of this kind of product sales, for example, or its product holdings by the gender of the customer.

So, with that, you can do a lot. So, that won't tell you the answer to everything, but with that, you can do a lot particularly in terms of getting a sense of where the real gaps are, where you're seeing changes over time, and why you're not seeing changes over time, perhaps, in areas that you want to see change. And you'll also get a sense of which FSPs seem to be doing a better job at attracting and appealing to women customers and that might make you want to start asking some questions to the others about what they are not doing and how they're going to improve the situation. So, that's a really kind of important starting point. It's not straightforward to do, but equally, you don't have to gather every bit of data to be able to do quite a lot if you can make a start in that direction.

What we also found is that some authorities, particularly, perhaps on the credit side, sometimes also on payments, have access to much more granular data because either they have a public credit bureau, and so there's more granular data there or, for example, they have a means of tapping into more transactional level data on payments. If you have an opportunity to do that, which might arise for different reasons, it might not be prompted specifically by your financial inclusion work or by your interest in gender, you can start, perhaps, to see different patterns and understand a bit how consumers are operating and think about what are the enablers, what are the things that are helping them that firms are doing? And firms can think about this too. And what are the things that might be holding them back?

The challenge with that is, it's a very... Obviously, that's a very data rich way of doing things and we know that sometimes if we go back to the colleague from the insurance sector, there can be perhaps a feeling that you need to have that level of granularity of data to be able to do anything. And it can be quite hard to justify the kind of cost and perceived burden on the financial sector to do that. So, I think a message there would be, if you have access to that granular data, then there's lots that you can do with it, but if you're in a sector where that isn't where you are at the moment, don't be too disheartened because you might not need that to address some of the key challenges in your part of the market or to make a start on addressing those.

Anatol Monid: Ernesto, if you can answer that question as well, but at the same time, Francesca asked the question, which I think is very much related to the topic that we're talking about, and Jennifer did a good job of hitting some of those points in her answer for regulators, "How can we support regulatory authorities in mandating data collection, and most importantly, effective use and analysis of data?" So, if you can bundle those two together, that, I think, will be helpful.

Ernesto Brodersohn: Yeah. I think the first thing, I think, related to the second question, and just going back to the first one as well, technology is scary and expensive. And sometimes both regulators and financial service providers think of these really sophisticated solutions. And we don't have to start that way. Sometimes, we are envisioning something more that needs to happen. And what I've seen in my experience in a couple of different countries is that regulators are always looking to do more with the data that they have and how much they can use. To go back to the first question real quick, I'll come back to this one, but there are other sources of information as well, regulators use. And even in statistics agencies, they provide some overview of what is the gender composition in different physical areas so that you can actually find out if an FSP, for example, or the industry is not tackling that specific area, then you can identify potential structural problems. Perhaps they're related to infrastructure or other issues that they could be addressed even at a policy level. So, that can feed back into the policy question that we were discovering earlier.

I think the other important thing that we want to discuss going back to this thinking of technology as a huge undertaking, we don't need to start with something very sophisticated if we don't have it. And technology is an evolution. I used to have a friend who would say, "If you don't have technology problems, you're in trouble because you're really backwards. You have to grow these growing pains that exist within the institutions to be able to introduce and continue to sophisticate the information that is received in an automated way."

And making it easy for financial services providers to be able to do the reporting is, I think... That is one of the things that I think Francesca is asking about. How did we reduce these burdens for the financial services providers and coming up with open standards that are easy to implement? Those are some things that are not so complicated and sometimes creating a portal for them to be able to upload their data in a standardized way. Those are things that can be done by authorities and in a way they're reducing the regulatory burden for the financial services industry to be able to produce, and I think Jennifer was alluding to earlier, we don't have to start with a very detailed, granular data. If you have it, that's fantastic, but you can actually start getting reports on a more aggregate level to be able to understand what is really happening. And with these structured data reports, at least, you can start being able to compare apples to apples and not only a progression on the timeline to be able to access and process the information. With that, I think I will turn it over to my colleagues. Back to you Anatol.

Anatol Monid: Was there anything that either of you wish to add to Ernesto's answer for Francesca?

Jennifer Long: Yeah. Maybe a little, if I may. So, I think that Francesca is highlighting quite an important problem here, which is, what can you do to try to bring the industry along with you, the FSPs along with you, even as you ask them to take action? And I think Ernesto has highlighted about the importance there of trying to kind of do things in a way that makes it easy for FSPs to comply. I think another thing that authorities can do and it's something that often gets overlooked, not just in this context, but we all know that data is a powerful thing. So, it can be really tempting to concentrate on getting more data into your building without having thought upfront about what you are going to do with it when you have it. So, I guess... That is something that will annoy your regulated entities intensely, particularly, if they don't then see some evidence that you're using that data.

So, I think to save yourself a lot of grief and potentially money, think first about, what do you want to use this data for? And what can you do.... What's the minimum data that you need to achieve that result? And anything else that you get is a bonus, but then you'll have a really compelling case for yourself for why you need it and what you're going to do with it. Whether you disclose all of that to your firms is a different question, but you at least will be confident that the data is not going to go to waste. And then the other thing is... And I think this touches back into something that kind of Petronella was talking earlier about within financial services providers, there's a really important thing to remember here, which is that, when we're talking about sex-disaggregated data and using that to understand customers, that really is fundamental to running a successful business. It's really fundamental to growing your business, keeping your customers happy, and in a financial services context and managing your risk because you have to know who your client base are to understand the risks in your business model.

So, there should be a really powerful case about why this is kind of intrinsic to running an effective business, helping you to identify commercial opportunities and make the most of them. And it may be that that kind of conversation can help, provided that supervisors are then kind of able to be kind of proportionate in terms of what they require to be done specifically for their own purposes about how thinking about this data can help the businesses themselves.

Anatol Monid: Before you answer Petronella, because I think this question and the following question dovetail nicely together, Francesca for your benefit, in our report, in the conclusions and recommendations section, we did put an action checklist [inaudible 00:44:01] what regulators and their ministries can do to help with this. So, I would encourage you to refer back to our report. And so, Petronella, if you can wrap this question into your response, what can regulators do to enable more service providers to appreciate the need to track and report sex-disaggregated data? And, again, I'm going to refer [inaudible 00:44:30] to our report, again, in the recommendations and conclusion sections, where we have action plans for financial service providers to help them deal with this. So, we hope that the report is not just something that will sit on shelves, but can act as a good reference, and over to you, Petronella.

Petronella Chigara-Dhitima: Thanks, Anatol. So, the two questions are actually related. One of the issues we found... It was interesting that some FSPs were not even resisting. I mean, if there was a portal, they were saying, "Yeah, we are uploading." But there was not this full appreciation of why they needed this data. So, I mean, if they actually understand why they need it from their own business perspective, and part of it is also something that regulators can do. Why? Because if you're collecting data and there's never a point at which the people are submitting that data, the FSPs benefit from the consolidated data. So, one of the questions I think that we asked was, at what point do you even share, say, industry-wide findings to kind of say, "This is how we are doing as an industry." Is that information available for the FSPs? Can they tap into it somewhere? Can they find it somewhere? Can they find something useful, which is already disaggregated, which is already showing, "Oh, women behave like this and that. And we find that women who are in this age group, they are behaving like that."

I'm not saying regulators should do that, but I'm saying the amount of data that's sitting... Actually, I'll walk backwards to what I said earlier on. The amount of data that was already been collected was a lot in the institutions, even in the authorities we talked to, but it wasn't being analyzed to the point where it was being useful to push policy or even to inform governments because some of the things are beyond the central banks, right? Or are beyond the financial supervisors. So, they would need to coordinate or work with other parties in the government and say, "Well, because of this data that we've been collecting, we have found for the past three years, women are doing this and that and that because there are no ideas." It becomes a very powerful tool because it's coming from the supervisory work that's being done.

So, one of the things that we found which was lacking, was the feedback or a portal that allows me to go in and see what my industry is looking like because I'm submitting something, and what does it mean? There were a number of pilots on the digital side where sex-disaggregated data was already being collected, but a lot of the institutions were just submitting the data. They were not very clear or sure of what this was.

The second piece is really the issue around... And I'll talk more from an FSP perspective, going back to what Jennifer said. The issue about being customer-centric is also about really understanding your own customer and saying, "I fully appreciate my customers and I really want to maximize the value that I'm delivering to the customer." And so, this is one of the tools in which FSPs can really say, "We are customer-centric," and if they want to go for the women's segment, they would really want to understand what are their aspirations, their needs, their [inaudible 00:48:04], and what are some of their challenges, and collecting this data is the first step of understanding that.

I think those two, for me, were critical. Really making sure that they understand the business. That there is a business case from their own business perspective, which is the customer-centric issue. And then the second one being the ability to use the feedback. The ability to actually see what we are providing and how it's painting the picture for our country, for our sector, whether it's digital or non-digital, what is it actually saying to us? And if regulators can feed back, that may also encourage FSPs. We found actually in some authorities that FSPs were being taken for training. And I think that's important. If you thought you were going to produce a portal and you want something, not only to train them on how to upload onto the portal, but the usefulness of what they are doing and how you intend to use this for policy or for other things within the financial services market. Maybe I'll stop there for now.

Anatol Monid: Ernesto, Jennifer, anything that you wanted to add on this with respect to FSPs? No? Okay.

Ernesto Brodersohn: I think just to add quickly. I think the question on how do they see the value, it's, I think, understanding industry-wide challenges like some of the things that Petronella was mentioning is key because that provides them room for their own growth and being able to understand what are the possibilities. Naturally, it does come at a cost to be able to produce these reports on a regular basis, but I think some of the FSPs may be interested in understanding what some of the gaps are that they could tackle if they had a little bit more information on what's happening in terms of potential marketplace that they're not tackling with.

Anatol Monid: Great. Thank you. So, I think that that was a principle conclusion of our report that is making the end-user aware of what the value proposition of collecting this sex-disaggregated data was important. Oh, they're keeping us busy. Lloyd's back. "What do you say are some of the main benefits for insurers to embrace sex-disaggregated data, particularly, in countries where women are generally financially excluded?" Well, that hits right to the heart of why we did this work, Lloyd. So, thanks for asking. And I'm going to let Ernesto kick it off and then we'll do the round the table.

Ernesto Brodersohn: Well, I think... This is a fantastic question. Especially when it comes to... It seems like Lloyd is very focused on insurance. And I think the question on the risk pooling, for example, for the insurance companies themselves to be able to understand what is happening on a gender basis, is understanding what are the possibilities for them to be able to reduce risks within the services that they provide. So, I think understanding it from a systemic standpoint from the financial services regulators, provides definitely an understanding [inaudible 00:51:49] what are maybe some of the systemic risks that exist in specific areas. Gender introduces a more softer or kind of smoothens the tail of these risks in many of these aspects. I think there are definitely really good synergies on understanding what is happening and maybe there's specific issues where women are known to be fantastic rate payers of credits and many other these things. And not only Latin America, in other countries.

I'm going to be politically correct and not introduce examples, but I think that there are definitely significant benefits on embracing the sex-disaggregated data and not, in general, but especially in insurance, there are significant benefits on understanding what is happening there and being able to understand what is the value of introducing gender and being able to cover women correctly in financial services such as insurance provides a much better financial model for FSPs. And, obviously, when you're covering and you're democratizing the financial services, it provides a significant financial stability throughout the country. So, I think it's a... I'll let my colleagues also complement, but I think it's something that we've been asking ourselves exactly how to get this going.

Anatol Monid: Jennifer.

Jennifer Long: Yeah. Thank you. Yeah, I'd like to think about this first in terms of a carrot and then come back to the traditional stick that we might use because we might need a bit of both to help our insurers see the importance of this. And some of what I say will be specific to insurance, but some of it's applicable, I think, a bit more broadly. So, I think in terms of benefits, and Lloyd, you pose the challenge about how they see the value in countries where women are generally financial excluded. Well, firstly, women might be financial excluded now, but they won't be tomorrow or the day after that. They're going to be an important part of your market and what we've seen in some countries, and there are many examples that can be pointed to, is that where FSPs have thought creatively about the market opportunities, they've actually identified products and services that women want and can pay for and will pay for that perhaps there is less interest in men. So, actually, you can grow your market this way.

So, obviously, that's again about targeting that data and being clear how you're using it, but it's kind of thinking about where there's a common interest between what we as regulators want to achieve and what the FSPs... Their own self-interest in terms of identifying new opportunities. And so, they're examples, for example, of micro-insurance for covering risks to kind of instability of household income, where they're examples where those products have effectively grown the market to women that hadn't perhaps previously held insurance products.

So, that's perhaps the carrot side. I guess we haven't talked so much about the potential, what's the stick. And we all know as supervisors that kind of... We, ideally, want to have both of these tools, something to encourage our regulated community on something that we use when encouragement isn't enough. And I think that's one reason why we have focused in our report on the intersection between inclusion and conduct of business and consumer protection supervision and how you can do that, coupled with the fact that in all the countries in our pilot and in many others, financial services firms like other businesses do have a legal duty not to discriminate between men and women and to treat men and women equally. It doesn't necessarily mean treating them the same, but it's quite powerful for a supervisor to challenge a firm about how you're doing that. If you don't even know, if you don't have any data, if you're not thinking about the data that you do have, how are you going to convince me that you're treating all your customers fairly the women who might want to access your products as well as the men?

So, there's something about challenging FSPs to evidence that they are really discharging those responsibilities. And that's something where we've seen some of the authorities in our pilot group and also some in other countries very explicitly challenging the senior leadership of firms to demonstrate how you're doing that. And the great thing about the conduct of business standards that are already kind of in place internationally is although I would like them to be more explicit about referencing gender, but what they are already explicit about is that there is no one customer. There are customers and customers have different characteristics. And so, that can be a really sound basis for challenging your financial services providers. How are you thinking about the characteristics of your different customer segments and how are you making sure that products and services you're providing are appropriate for them? And that is absolutely fundamental to conduct a business supervision, and you can use it in your discussions with them about gender specifically, and also in other potentially disadvantaged or less included groups.

Anatol Monid: Okay. Petronella. [inaudible 00:57:41] wrap up.

Petronella Chigara-Dhitima: Okay. So, let me just add to what Jennifer said. The size of the market is mind blowing. I happened to come from one of the countries where women are financially excluded. So, I fully understand, especially for the insurance. When I think of the insurance that's being sold, even to us... I mean, to women like myself, there isn't any thoughts about what would I want which is different from what men would want. So, already from the starting point, I think there's a lot of information that is out there, which is available and which insurers are not harnessing to be able to offer a better service to the existing women customers, but more so, as Jennifer says, to expand their offering and to expand their market size.

I mean, the markets... If we're talking about FSPs and insurers, the market is becoming a lot more competitive. Digital players and FinTech players who are not the traditional players, who may not even be regarded currently as insurers, are coming in and offering these kind of products, especially on the micro-insurance front. Why? Because the traditional insurers are not looking at this segment, and they're not really paying attention to the segment, to the women, but to think of it from a benefits' perspective, when you think about risk pooling, it's a game of numbers. And when you think about the population, particularly for Africa, I can talk about Sub-Saharan Africa. A lot of countries, more than 50% of the adult population is women. So, 55, 52, 53, figures like that. So, there's a huge population that's out there, which has not been reached, and it's a potential market. So, you are sitting on this [inaudible 00:59:31] potential, which you can tap into. So, that's one thing that you can talk about.

And from a risk pooling perspective, the more you have, I mean, the better from an insurance perspective. So, if you have a million customers who sign up, I mean, the risk pooling even works better. The third thing is about the stickiness. The fact that women really become loyal. And I will highlight this. I know there are a few Zambians, Kenyans on the call, and across Africa; Sierra Leone, Rwanda, savings groups are a big issue, but the big thing that we fail to recognize about savings groups is that it's actually an insurance mechanism. It's a way of managing, what happens to me when I fall sick? What happens to me when I die? Part of it is the social capital, how these women will come together and bury me.

But another part of it is actually the financial piece that they will come with burial, with... I mean, a lot of us from Southern Africa, we know about burial societies that they have been going on and on and on for centuries. So, it means that these people need insurance. They're actually fulfilling those needs through informal mechanisms because the insurers are not doing much about it. That's why you have more women in the savings groups than men. So, I think there are lots of benefits for insurance to embrace sex-disaggregated data because it's your starting point. If you find in your portfolio only 5% is women, then you will know that you actually have a huge market that you have not tapped into.

Anatol Monid: Thank you for that, Petronella. And thank you, Michelle [inaudible 01:01:07] for your comment in the chat about the fact that insurers typically price and underwrite using sex as well. So, certainly on the life side, that's true. Of course, it is getting to the excluded parties that it is important. So, I'm going to ask you one last question each and I'm going to ask you about what you found most surprising in the work that we did last year. What finding, what observation, what outcome you found the most surprising from our work, and that will wrap us up for today's session. Petronella, you started us off with the presentation. So, who don't I let you start off as well?

Petronella Chigara-Dhitima: So, because for me, I really come from the financial inclusion industry and gender is something that I'm passionate about, what I found surprising was the fact that... We kind of agree and talk right, but we are not doing as much as... I actually was surprised that there isn't as much. Even when I was looking for examples. Yeah, you'll find them, but they aren't as many of what regulatory authorities are doing, particularly, when you're looking at the Africa region. Latin America, we had a few interesting examples. And I think, for me, that was really surprising that we need to have a lot more demonstration sites, if I were to call them, that are demonstrating that this can be done and this can be done well. So, to me, that was a big surprise, especially from where I'm coming from. Thank you.

Anatol Monid: Okay. Ernesto.

Ernesto Brodersohn: I think there were some really good surprises in understanding what authorities are currently doing. I think because there are in most of the countries that we saw, I think... I was surprised in some countries that were very advanced in understanding what data they have to be able to gather their data in a structured way to be able to come up with a strategy. I guess what is a little bit challenging is understanding what the value of this data is. As a former regulator and supervisor, I think we tend to reduce the value of the data that we're gathering in general. And I think that the understanding of what these assets are meaningful. I think the challenge comes now to be able to say, "Well, how do we make it work for the financial services?" Which is not a little bit less of a natural way to think about exploring data so that the financial services can develop and you have a little bit stronger financial sector.

So, I think I was pleasantly surprised with many examples of these. I think there are really good opportunities to be able to structure it in a much more systemic way within the institutions, but I think the challenge is understanding, how does this data really... I think it relates to some of the questions that we had earlier. How do we show that this data is valuable? And sometimes, we, ourselves underestimate [inaudible 01:05:00] regulators, underestimate what this value is because we see the sector from above. And, obviously, we need to be careful about the specific commercial strategies that each individual may have to be able to share this aggregated data, but we also want the sector to continue to develop and deepen and broaden in the financial services that we provide.

So, I think it's something that we need to keep working on it. I think that technology is there to help. And I think coming up with a strategy that [inaudible 01:05:43] these different visions from a technology and strategic standpoint, I think, it would be beneficial for many. So, I think with that, I'll wrap it up. Thank you.

Anatol Monid: Last word to you, Jennifer.

Jennifer Long: So, I think, for me, a really surprising thing actually was, I guess I had expected that technology would be the problem. And I came away with slightly a different impression, which is that more of a difficulty for supervisors is being really clear how to use a particular piece of data to really take action that supports a change and inclusion rather than describing the situation. And I think like Ernesto, we saw some great examples of how that can be done, but realizing that that is not necessarily intuitive and something that supervisory authorities may need perhaps a bit of help with in future and a bit of learning through communities like this about what works and how to make a start. It's not the technology that's going to hold you back. It's being clear about what you can do with the data that you have.

Anatol Monid: Thank you very much panelists. A great job. We can share that we are continuing to do work under the funding of the United States International Development Group and that we'll provide more information for you on this and some tools to help carry on the thoughts that we have. Please, if you haven't already have a look at our report, it's available on Toronto Center's website and it can be a useful tool to help you think about using sex-disaggregated data and technology to achieve female financial inclusion and financial inclusion generally. So, with that, the questions have dried up. Let's call it a day. And thank you very much. Thank you to the audience for your attention and to those who asked their questions. We really appreciate it. Bye for now.