 I'm in the studio today with Sasha Pulverini, he's a senior program officer with the Bill and Melinda Gates Foundation in the financial services for the poor division. But perhaps more excitingly, he's also the chairman of a new ITUT focus group on digital financial services and he's with us to take part in a special workshop running today. Sasha, thank you very much. Thank you for inviting me. Could you tell us a little bit about the workshop and particularly about this new focus group? Why has it been set up? What does it hope to achieve and why is the Bill and Melinda Gates Foundation involved? So this focus group, this is the first day of a two-day event, so today and tomorrow we have almost more than a hundred organization registered for this event and tomorrow is the first meeting of the focus group on digital financial services for financial inclusion. And I think it's important to highlight and stress the financial inclusion element of this activity because we are not there to really develop a digital financial services market per se. We are really trying to understand what kind of solutions could be developed or discussed and reaching consensus amongst different players to provide market participants but also policymakers with new tools that could help them advancing the financial inclusion agenda locally. So this workshop is a way for all the participants or participating organizations to kind of refresh a bit their understanding of who's doing what. There are a number of organizations, internationally leading organizations like the World Bank, CGAAP, AFI, GSMA, who are playing an increasingly important role in this space. And so the question could be why the ITU today and why the ITU is interested in digital financial services and financial inclusion. The reason is that we are not planning with this initiative to duplicate work. We're really trying to understand where there are issues that are overlapping or where there are gaps that needs to be filled so that putting together a wide group of organizations from different perspectives with different interests but part of the value chain when you think about digital financial services, whether we can reach a broader consensus on some of these tools. And so we're not there to duplicate work but really to leverage what has been done by the other players, the other organizations in this field and get a broader agreement on some of these solutions. A question of bringing in the international community, public and private sector, a meeting place for best actors. Right. So when we're thinking about digital financial services, particularly in our perspective as the financial services for the poor team, we traditionally have focus from a regulatory and policy perspective on a very limited number or class of policy makers, the Central Bank and the Ministry of Finance, because we're talking about financial services and they are the lead regulators in this space. So when we add the digital objective to this expression, digital financial services for digital financial inclusion, then we need to think into account that there are other players and there are other regulators that needs to be part of this debate because increasingly these services are offered by non-financial institutions. So mobile network operators, which is the industry that the ITU kind of regulates. This is your constituency. So we thought that it was really the time to think about a broader community of regulators and how these regulators talk to each other, how they communicate and how they collaborate to find the right solution for the market to develop. Will they be able to speak the same language? Those two regulatory communities are quite strong and no doubt have their own parameters, their own language. Do you think that they'll be able to find a common ground easily? I think there is a way to find a common ground. But there are some examples of good communication and good collaboration in some countries. I mean, I wouldn't say it doesn't happen at all. But it's still an area for improvement if you want. So potentially we could also say that there are other departments of a government like agriculture or the Ministry for Interiors that might be also involved in this debate because I mean, it's a broader debate. Financial inclusion is not just finance and delivering financial services, also possibly digitizing social funds delivered to the community. But at least if we have these two particularly set of regulators, the telecommunication authorities and the central banks talking to each other, given that there are still areas where there's a lot of uncertainty of who's doing what. And so roles and responsibilities are not that clear. And in our perspective, more clarity can help the market because instead of having opacity and ambiguity that can lead to arbitrage and inefficiency in the market, having a clear understanding of who is doing what and what are the roles and responsibilities for each is creating a better ecosystem and a better environment for the industry, for the regulators, a better understanding of the risk, and hopefully a better provision and supply of services for the poor, which is our target. One of the other participants actually in this workshop had stressed to me the importance of competition in the digital financial services market so that prices stay low for the poorest people who need to use these services. Absolutely. So this is certainly our focus is to deliver affordable and sustainable and scalable financial services for the poor. And so the cost items, the cost item is an important element of this equation. More activities are really aimed at thinking about a solution to reduce cost because most of the time when the industry pay a higher cost for compliance reason, for investment, for other sorts of reasons, they tend to translate those costs to the customer. And so for people that are living with less than $2 per day, even paying 50 cents is going to be a big challenge. And so thinking about different business model and solution that can reduce the cost associated to these services is certainly one of our main objectives and challenges. You and I were talking a little earlier on the issue of diversity. Is it really fair to talk about the poor as a block or are there different ways that we have to reach different communities, for example, women or perhaps different cultures, different parts of the world? It's not certainly a block. It's a very diversified block. I think we couldn't say that if we quote the traditional number, we're talking about 2.5, 2.6 billion people living with this due to dollars per day. There are differences because of cultural differences, because of the fact that women and girls, for example, are at disadvantage. Even within the segment of the poor, they are a sub-segment. And then we can also single out, for example, smallholder farmers as another category of poor people or poor households that have different needs because it's related to their business. So it's definitely a diversified community that has different needs and probably at some point we would have to think about different solutions for different clusters of people within the poor. What about barriers like literacy, numeracy, local languages? Is this something that you'll be looking at in this new focus group? Well, not specifically. We tried to find areas, as I said earlier, that are really lying in between financial regulators and telecommunication regulators. So there will be some technical aspects, if we think about, for example, security. This is an area where maybe the central bank has a perspective about what is the right level of security that needs to be guaranteed in the system. Apart from an infrastructure perspective, also in terms of who needs to guarantee that high level of security, this is probably the owner of the channel, and so the telecommunication company, the mobile network operators, and here we see a role for the telecommunication authority to make sure that robustness is guaranteed in the system. So literacy is more linked to policy objectives and consumers' protection policies that are more part of the policy that could be developed by the central bank or the ministerial funds. I was wondering maybe if technology could help overcome some of those barriers supporting a text-to-voice capacity to overcome people's inability to use a written interface? There might be some of that covered by the focus group, because we are going to have a subgroup. So the activities of the focus group will be articulated in different subgroups, because of being such a large group of organisations, we can't proceed all together at the same time. We have to divide and conquer somehow, and so we will have different work streams with the chair and the lead. One of the working groups that we are thinking about developing and organising is about technology and innovation. So if the security system that relies on the PIN code is not the most efficient and there are new technologies coming up on the market, then instead of numbers use pictures. That could be something that we want to track at least. So understanding what kind of disruptive technology would be adopted in this market. Tell me why the Bill and Melinda Gates Foundation, a foundation that started its life in the health sector, is now looking further afield into things like digital financial services. So the objective of the foundation in general is to really allow all people to have a healthy and productive life. And one of the ways to achieve these objectives is really to promote access to financial services to all. And the segment of the population that we are targeting, those people as I said they are living, who are living with less than $2 per day, they really struggle to access financial services, the former financial services. So really going to a bank, open an account, having savings and insurance. It's very costly if it's not at all to say that it's impossible almost for them to access these services. So they go into the informal sector. So savings group or they get money from family members, from friends, or the big phenomenon of the remittances is people in the diaspora sending money back home. So the idea is really and the approach we're taking that access to financial services can increase welfare. And so can really allow poor people to and poor households to seize business opportunity that can lift them out of poverty or can allow them to weather shocks. And we know that in this situation even a disease or a death, sometimes even a positive event like a wedding could be very capital intensive and can really push a family in poverty again just because the expenses that are associated to these events are very, very high. So access to financial services is important and there's increasing evidence that is really increasing welfare if it's properly done. But these services are not available just because this segment of the population, the poor, they transact in small value. So they transact a lot but it's really very, very small value. So for the brick and mortar tradition of financial institution it's becoming very, very difficult to think about a business model that could be profitable for them. And the use of the information and communication technology, the use of mobile technologies and mobile devices through which you can pay bills or you can transfer money from one person to another person domestically or internationally is the first step to then bring these people more closely to financial services. With the objective of course not to allow them to just transfer money because the simple transfer of money and the simple payment is not being financially included but really as a first step on a ladder if you want where at some point they will be eligible and they will have access to small credits, small insurance and small savings. One last question. It was mentioned in discussions earlier this morning that this can have even wider beneficial socioeconomic effect because not only does it help reach out to poorer people but it helps governments in poorer countries deliver services much more cost-efficiently so improving their services to their own communities. Do you agree? Yes. This is certainly one of our objectives and an area of intervention is how to digitize government to people payment. So this bulk payments, if we think about countries like India or Indonesia that disperse huge amount of money in subsidies, social subsidies, family subsidies that currently are dispersed in cash with lots of inefficiencies with potential for corruption and the uncertainty that the recipient receives the full amount and is the right recipient. So by being able to digitizing this bulk payment we have examples of efficiencies that can be gained in terms of cost reduction but also the traceability of these payments that is increasing also the reliability and the transparency of the whole system and making sure that the recipient really get the money they are entitled to receive from the government for their needs. So this is certainly an area that can allow to create a significant mass because instantly poor people will be able to access an account, a mobile wallet or a bank account to receive these subsidies which can then be the open door for other services later on. Sacha Pavarini, very best of luck with your new focus group and look forward to catching up with you in a year or so to hear how things are going. Thank you.