 Dwi'n gafodd. Wel, ddwy'n gilydd i chi, ac rydw i gyda'n gondol yma yn ddafos ar y FFF o'r sefydliadauín o'r ffordd sy'n eu ffordd o'r ffordd o'r ffordd a'r ffordd o'r ffordd o'r gondol. Mae'n rydw i gyrdd o'r ffordd o'i'r ffordd o'r ffordd ac o'r ffordd o'r ffordd o'r ffordd. Yn ddwy'n gondol gwelio gloedd. Mae'r cyfnod oes iawn i gyd yn gweithio i'r ffordd fel ymddirionedd a'r cyfnod o'r cyfnod yn ymddirionedd, ond mae'r cyfnod o'r cyfnod o'r ffordd yn ein bod yn cael ei gael ar â'r llyfr o'r rhifn, a'r cyfnod o'r rhifnol yn cael ei gael, oes eich hunain cyfnod i'r BBC yn London, yn ddechrau ffintech ymddirionedd, ond mae'r rwynt i'n West Bengal yn Indiad, I go back every two years and it's almost like a kind of slow motion slideshow and you see the changes in my cousin's lives, the emancipating power of technology to change people's lives and whether it's the subsistence farmers who were only a few decades ago had no access even to the basic democratic information about what the market traded prices for their goods were and get ripped off and impoverished by semi-evil middlemen who now have that market pricing power or whether it's the female entrepreneurs lacking the capital, the ability to borrow the microloans pioneered next all from West Bengal and Bangladesh by Professor Eunice through forums such as these innovations have refracted back not just from the western capital system to developing countries but from developing countries back into the west in less in impoverished areas frankly of countries like my own they're using some of these techniques pioneered in developing world so amazing that these are the sorts of forums where those ideas get transferred and hopefully that's what we can do today many issues the lessons of the pandemic when you open up the financial system to so many hundreds of millions of more people what happens now global interest rates are rising to some of these loans what happens when incomes are so squeezed between rising energy and food is there a smarter suite of products that can help act as some sort of bridge in terms of this cost of living crisis for these types of customers and where does it all go in a future in a world of central bank digital money where transactions can be traced to the person time and geolocation you can if you're down the line watching this you can go to slido.com and type in fin inclusion f inclusion into the hashtag and you'll be able to ask some questions that we can pick up and put to this great panel and the panel I will introduce in a moment it's an esteemed panel but as esteemed as it is we have a greater honour as you can see in the form of a majesty queen maxima of the Netherlands the United Nations secretary general special advocate for inclusive finance for development who wants to help set up this really important session so your majesty the floor is yours thank you very much thank you very much for this very good introduction I love the way you actually said it's a slow motion slideshow and because it is true you see if you're there you don't really realize but you know so much has changed and we have come together at a very defining moment as we emerge from this global pandemic that has kept us apart for two years I'm very happy I just arrived to be here back again we are seeing that it has also spawned really an unprecedented number of digital connections when COVID-19 hits governments rush to provide financial relief to citizens often through digital talents at the same time social distances force people to find alternatives to cash and face-to-face shopping more money use it skyrocketed in latin america alone 50 million adults began using digital merchant payments the latest data will arrive this summer in june when the new global ffindex is released but we already know that over 1.2 billion adults have gained access to financial services in the last decade and we are expecting that to grow by many millions more now if we have learned one thing about financial inclusion it is that better access new users and higher transaction numbers is simply not enough over the last year I have advocated for enhancing the resilience of underserved groups in the face of economic shocks so they are better able to seize economic opportunities MSMEs have been hard hit by COVID-19 especially informal ones and those owned by women for these enterprises going from pen to and paper to digital is one of the keys to financial recovery and resilience at the G20 leader summit in Rome last year I urge governments to accelerate digital solutions for SMEs around the world going digital can open new markets and have businesses more efficient a digital ecosystem can help small businesses better manage the inventory marketing payments credits and sales it can also help MSMEs gain access to financial services for example their data footprint can be used by financial institutions to provide financing more quickly and at better rates another very important issue is once a population is financially included does it really lead to better financial lives are they financially healthy good financial health means being more resilient to financial setbacks and better equipped to seize opportunities a financially healthy population can recover faster on their own and relieve pressure on government safety nets this is a responsibility that concerns us all financial health should be a common goal of governments regulators the private sector the financial sector and NGOs for financial service providers in the room you will likely discover that investing your customers financial health will mean they can pay their loans on time purchase other products and services and cost less to self there is a very strong case on financially healthy customers having better information insights on customers can also help you design products that influence financial behaviors for the better saving products that not people to achieve their goals are a very good example now as we continue to close the financial inclusion gap I encourage you all to apply a financial health perspective to all your efforts this will enable us to achieve the purpose of financial inclusion and create more resilient economies and probably more stable ones thank you very much for your attention I hope you have a very fruitful discussion thank you thank you thank you thanks for joining us I know I know you have to run off the next one but I'm so going to miss him not at all thanks again for coming thank you now okay we're going to we're very efficient with our we're just going to great oh no I think excellent right so we are now going to complete the panel up here people have been queuing to be on this panel so let me quickly introduce in order here of course we have the governor of the bank de france uh central bank of france uh François Villore de Gaill and then I'll just we're in a and then uh we will have in a second uh Gelsa Mina Villioti who is just going to replace his she's thank you Gelsa Mina thank you very much who is from the european investment bank and a former senior official in the italian treasury um then we have uh andres solistio the chief executive officer of the go-to group in indonesia we have adeem Ahmad of the lulu financial group in the UAE uh and then we have a carabo morule of capital art who is a uh an act who was an act tree or it still isn't i don't think you ever lose being an act tree but now runs um a very interesting uh the the capital art project which is trying to refashion how people treat african art so again keep those questions coming on slido let's um uh let's begin with you carabo about the uh because we've got perspectives from every continent here and it's really important different savings cultures different borrowing cultures so there isn't a one-size-fits-all um tell us about your experience of financial inclusion and spreading it as far as possible and where it's going so for about 10 years i actually worked at all mutual which is a large financial services conglomerate in south africa focusing on middle income customers and you start to realise that even when we think yes people are in the middle income know everything about financial finances you start to realise that actually they don't necessarily do so and financial education plays a really big role in that particular market to help them think about financial inclusion in particular exposure to insurance products and i know we often talk about financial inclusion in relation to banking but actually insurance products are there to kind of really make sure that you're reducing the opportunity for a large financial outcome to ruin you financially by making small contributions over time and passing on that risk to somebody else so that's something which i think a lot of people miss but it's been incredible to see and now i also sit as a non-executive director of time bank that's the first bank in south africa to have their bank co-banking platform in the cloud and they've been doing some phenomenal work in the area of financial inclusion and actually won two awards with a focus on a women specifically and they've been doing a great amount of work to focus on people who are in low income making sure that you know their bank account doesn't attract bank fees so you can deposit an amount kind of two years ago which is like i did because obviously i sit on the social ethics committee i wanted to make sure i experienced the services of the bank and the same amount is still there even though i have not touched that amount and that really plays a big role especially for people who are financially vulnerable around how they use that account for savings which a lot of people then aren't normally able to you know for example access things like money market funds where the amount that you need to invest on a monthly basis is around 500 rand all these people are kind of earning less than five and a half dollars a day and that's why these types of products are really important well you immediately corrected me because i've totally forgot about insurance and of course insurance is like the most fundamental protective barrier for people against calamity there's plenty of calamity around at the moment encourage all of you you know your territories in your markets give us an insight into the data you know how much it's spreading how it's changing savings culture or borrowing culture let's go on to mr armad's perspective from the the UAE sure um so we're a UAE based entity but we spread across 10 not countries you know so GCC Indian subcontinent and Asia Pacific you know i'll take the example of two countries one is UAE and one is India of course where we have large presence out you know so the major question for us is to get the unbanked and we are much into the cross border space where we have migrant populations looking at the the whole demographic of the GCC countries you will find that you know around 80 percentage of the population is an expatriate population and they work there to send their money back home you know so how do we get these money back into the accounts of people are out in the most effective manner the shorter period of time and the most cost efficient manner out you know that becomes the first chain you know and the second chain about for where we try to identify is to create a customer experience journey out you know where we kind to understand where this money is used so that on the other end of the of the customer journey we try to give them micro loans and financing and so on so forth you know the biggest challenge that we have faced on this side is is one is to find identify data of the end consumer use mapping of the financial journey of each of the consumers we were not able to find out how to collect the last mile availability in each of the countries because of the rural accessibility is becoming a bit more harder and the positive side is that India has taken a giant leap on this aspect you know with with coming out of Aadhar which is an identity proof today covers around 90 percentage of the the population in India has really helped us to really fast track that journey out you know and also with your unified payment network that has now come to play in India which is really really helped in terms of making sure that you know we can get the money out into the consumers and the shortest and the most cost effective manner similarly if you look at UAE in 2009-10 they came out with a wage protection system which is a unified platform that has been done by the ministry of finance and the ministry of labour where it enforces that every employee needs to be paid through a bank or a plastic thus ensuring that they get paid every month and there is a traceability on this usage of funds you know so this all these these very effective methodologies has really increased the inclusiveness in this vast two countries if you really look at it India receives around 87 billion every year into inward remittance flow and a large amount of that money comes out of the GCC countries you know and to effectively manage the use of this fund in the closest possible time the use of technology has really helped us and I think so the last three years have really fast-tracked the use of this digital transformation and today the use of internet of data has also further helped in making sure that you know the customers of both the sides are well taken care of and just really quickly in India I just have no concept I have a concept that in the UK in the US we borrow and in Korea they save right in India I just can't really quite you know are your are your new customers your newly included customers are they savers or are they borrowers are they boat you know it depends on which generation they are from okay so it's a generation it's the same model the same model you know so the younger generation are yes they are more on to the spending side of things the earlier generations are things but you know a very interesting aspect that we've recently found out is how the migration pattern has changed you know a generation before the migrants who were living in UAE as such used to save money send it to the subcontinent they used to buy real estate down there the younger generation today takes a flight goes back to the the subcontinent sells everything that their parents have made and bought the money outside the country so there is also a reverse flow of of funds that are happening at this point of time because of larger level of globalization that is happening and you know people moving out of the country as well you know so that's a very interesting stimulus that we have seen in the last couple of years could be a trigger of the COVID where people have found out other countries to be much more adaptable in terms of quality of living and so on so forth or the the ability for you to work from anywhere in the world you know and need not to be in in one one particular junction and you two have already proven to me that you know when you have the numbers the data the actuarial data or the lending data you know how society is changing more way before any politicians or journalists frankly but i'm reminded by remittances obviously bigger than aid flows i'm not quite sure by how much but somebody will have the figure let's go on to your experience in indonesia fascinating technological developments that you've pioneered why don't you tell the the audience about them and tell us about them the marketplace yeah sure um so we're uh we we're i'm from go to um so we have a a few products uh one is a gojag tocopedia e-commerce and also on-demand services one of the interesting thing that we've um actually experienced is that um to be able to address the gaps for financial inclusion first we have to bring society into digital inclusion first and that's actually something that we experienced with the rate of development of our government on infrastructure such as accessibility and connectivity it gave birth to companies like us in being able to actually use digital means to connect a lot of the undersurf into the formal economy and that happened with gojag and tocopedia as well seven years ago in gojag cases we actually serve what we call the ojek community which is an informal motorcycle drivers who are undersurf not part of formal economy we empower them to be the last mile logistics for people to go somewhere to deliver food deliver items and whatnot and suddenly what started as tens of thousands community now became like three or four million of you know these populations that serve using technology and being able to be part of the formal economy because of technology similar in tocopedia a lot of merchants before if you wanted to sell in Indonesia you have to be in shopping malls big city jakarta surabaya and you have to be in shopping mall to be able to market your product with tocopedia with the with our marketplace concept where we connect users with lots of small micro entrepreneurs or mom and pop shops that allows transaction to be happened borderless and wherever you are you can be in a small city in Indonesia you can sell to customers in jakarta and then that that connection is important now it's important to start there because our experience is that if we don't help to actually get them to generate more income first it's hard to sustain financial inclusion because it comes after so what what our experience is that once we see the small merchants small driver partners that doesn't have any track record before and because we are a platform that connects their digital transaction suddenly becomes a track record that wasn't there before if they go to a bank they will be rejected because you know you don't have a track record we do and therefore a lot of the development is actually to help them to you know for us to use those data to them provide them with financial products it could be savings it could be working capital it could be lending insurance we talk about insurance and stuff and that is actually a emotion that actually will be sustainable because you introduce them to more income and then we help to manage their operations or their life better with financial product and therefore the financial well-being will be sustained but but that's just a one story part of it there's there's plenty of more development that needs to be done i think there's a special mention about things like real-time payments upi adar infrastructure private and private and public needs to work together to ensure the infrastructure for financial inclusion can be cheaper things like real-time payment is such a valuable infrastructure if cost of moving money is not close to zero and seamless it's really hard to actually build sustainability and i think the great thing is in Indonesia government is realizing that and there's a lot of development on that so we're looking forward for that next evolution and stage so i was talking to you is amazing innovation and creativity in in targeting an financial excluded group that is critical to the way that the economy works and expanding from there and but then also critically using your information and data to be able to develop financial products so in the same way a credit rating agency might do it you have a different source of data how very very interesting um uh so moving on um to um jelsa mina um uh you know from a european perspective um it's obviously different the market's more developed but you help fund some you help fund you know those people who are continue to be excluded in the uk in the u um and some development projects outside as well yes no definitely uh first of all thank you for um having inviting me to to this panel for two reasons you mentioned very beginning that i came from the italian treasury actually i joined the european investment bank last year after that uh you know i ran the the finance track of the g20 and actually you know um within the italian presidency but also under the indonesian presidency and also under previous presidencies of the g20 the financial inclusion is one of the most relevant topic because you know you know there is a widespread recognition that you know providing access to finance is an opportunity to grow to to be inclusive and so in this regard it's something which is very relevant to to my career and also to the aab the aab the european investment bank we are a large financiers as you rightly said we mainly invest within the european union but we have also a large portfolio outside of the european union actually annually we invest between eight and ten billion outside of the european union and where we invest you know i would say that we go from a large infrastructure which are important you know for the for the economies and also to the financing of SMEase actually SMEase it's a financing as SMEase is at the very center of the activity of the european investment bank both inside the the union and outside of the european union and i can give you some example what we do also within the european union to include person let me start from the outside of the european union actually you know so to start a business uh uh you know in a difficult environment in fragile economies you need you know i mean we have to rely on financial intermediaries so our first task is to find what are the right financial intermediaries which can go along with our objective that can ensure that we can achieve the objective that we want to achieve and that is to to create a business case you know actually you know what is not it's all important to have access to finance but also to have you know it's uh it's a business case to be financed and actually i think that what is most important is the access to finance but at the same time also providing the the skills and the ability to create a business case because you know very often you know when you have a business case it's uh it's much easier to to get finance for a sustainable investment because in the end you know once that you start an activity you you need also to run it and to to get it sustainable so outside the union we have several examples and i like to pick one of the example which bring in the insurance case actually we invested in a fund as i said you know we go through financial intermediaries through to funds and actually we invested in the funds in a fund and this fund is operational in 10 countries and they offer finance to micro and small and medium enterprises but at the same time also an insurance against the climate adverse effect because you know especially with the agriculture sector we know how relevant is that you know it's a farmer can be safeguarded with respect to the impact of extreme climate in jordan we we finance access of women to to finance it's a it's a fund which is completely dedicated only on on women and uh we have a very interesting case also within the european union with the the roma communities in bulgaria and romania actually this is a very underserved segment of the society and through the european investment fund which is a subsidiary of the european investment bank which actually uh it's a it's an instrument whose motto is uh we believe in small and which is dedicated you know to to the small and medium enterprises and through this instrument we provided guarantee for roma communities for entrepreneurs within the roma community so that they could start their their business so there are many underserved groups within also within the european union you know and we have to look also at the way in which we can provide the social impact and you know finance can also provide you know the opportunity to to create the social impact and especially if you you provide the people the right instruments and the right skill to prepare their case and to access finance and this regard for instance we also provided the online course on on financial inclusion so that you know through a direct access to the to the our website there could be the opportunity to to have you know information and to have a basic basic basic skill great well so we continue the telling the tale of how important this agenda is and also how it's applying itself across different continents uh i'll continue with one more easy question for the governor in terms of how it applies in a developed country um such as such as your own in France before we get a bit tougher i will try to be tough already and saying that financial inclusion has probably two parts the first one is universal access to financial services i would say some words about that but the second part of the second pillar is the right use of this financial services and this second challenge we have it in common between emerging and advanced economies let me say one quick word about the first part universal access here obviously in emerging and developing economies digitalisation is of the essence it's a very powerful accelerator as Her Majesty shared we will see what the next global findex figures are but to give you very impressive figures for Africa under your control 10 years ago in 2011 less than a quarter of African people had access to financial services we hope that by the next findex more than half will have access in 10 years thanks to digitisation in France the same figure is more than 95 so we don't have real problem of access we have by the way a right in the law to banking account and the central bank is responsible for this procedure and we could even say that digitalisation could raise some questions it's a very powerful accelerator i was impressed by what you said in most economies in our case we need we need less this accelerator it could create problems for older people it's the only caveat i would say i come i don't know if there are some in the room okay no i can if you allow me to the very important second pillar right use of financial services and this is what we call probably financial education of financial literacy this is an international challenge for all of us on this stage for all countries it's a new ecd priority and let me tell you a small story which might be of interest we in the central banks were attributed this mission not very late ago it was 2016 so six years ago it was a very significant change and frankly at the start there was an internal discussion is it a core mission for us is it a serious then say monetary policy or banking supervision very core missions with figures where much technicality where central bankers are usually expected yes it is core mission and let me say some words about that it is core mission first due to its objectives prevention for example it's very important we are in charge over in thatness if we help some poor families to manage better they budget we will have less over in thatness we talk earlier about cryptos and young people if we help young investors quote unquote to be careful about cryptos to say the least and to know that there is no sure bet and that it can be an illusion as we saw in recent months it's part of our business but let me give you still two objectives which are still more ambitious on monetary policy we could think that there is no relation there is because we must learn how to speak not only with market specialists ECB waters in our case or excellent journalists but also with a broad public think of inflation expectations think of the inflation worries today topic number one in most of our countries we must speak to the broad public and expect how monetary policy will re-anchor inflation expectations think of a very simplistic question did you try to explain to your family i tried my children i educated but they are not economists can you explain me dad why when you raise interest rates you decrease inflation it's not that obvious think about it this belongs to financial education and the efficiency of monetary policy and the last objective is about democratic debate i strongly believe on that there are many economic issues which are more and more complex about distribution growth etc and the economic consequences of geopolitical shocks if we give our fellow citizens some tools to understand it's probably the nicest mission we we can have and let me add if i still have 30 seconds facial another point why it's a core mission but a very innovative one it's due to its objective it's also due to its ways and means we cannot do it alone monetary policy we are in charge bank supervision we are in charge but for financial education we are more or less the conductor of an orchestra including NGOs including yes media and to give you two very quick examples first education teachers and now we work with the teachers and for young people who are about 13 or 14 years old we have introduced a financial past so to say which will become systematic it's a huge change and second gamification do you expect monetary policy staff to be very technical guys experts to present figures slides curves etc but the most efficient way is escape games and now we come with our escape games and we try to increase financial literacy with that frankly i didn't expect it i'm not a specialist in escape game but it's for me a story of humility and hope good okay right let's we've got we've given you a broad vista now let's just what i'm fascinated by and i want the whole panel to respond to this um is we've had this financial shock that's hit the whole world the pandemic and there's another shock now in terms of prices uh we can all be very happy and smiley about how the great opportunities of of this agenda but let's be clear the covid pandemic i don't know about your country's but in the uk saw a massive exponential leap in the fraud and scams on the most vulnerable vulnerable people and and there's a flip side to including people people which is some some of the dangers i just i just wondered what has been the record of the newly included during these extremely difficult financial times the stress test if you like to what you're trying to do and um and what lessons do you draw from the data about the financial behaviour of of some of the newly included who wants to go first maybe andre um yeah so so just just sharing some experience i think during the pandemic um one of the positive thing and again a lot of the perspective from our side comes first from the ms me's and then let's talk about the consumers um because of the pandemic there's a rush on a lot of these micro entrepreneurs and businesses to go digital and therefore a lot of what we innovate uh either through our you know e-commerce or food delivery um for food merchants and stuff is to be able to help them to onboard very quickly so easily so that anyone can actually start right and that's that's the case and we saw um you know a couple of millions of new additions into the system to the market opportunity there was the main factor exactly and okay and that and that actually was a saving grace if you may yeah where where a lot of the income that was lost now gotten back because of that opportunity and we also see a lot of um um people folks who actually lost their job started becoming an entrepreneur because of how this these platforms makes it very easy for anyone to start a business and that's actually a there's a lot of positivity into it that might not no no no i'm not i'm not trying to be a journalist trying to create control but but you know let me give you an anecdote i mean i am and we'll spread this out you know i remember when mobile phones the story i told you about west bengal you know mobile phones came in the farmers were excited about having the prices text message to them but they were also being texted by a reputable mobile phone company you know click this bollywood person if you like them and guess what they were charged 10 rupees you know that sort of stuff happens too and in barely literate or you know or newly literate populations and newly financial included populations um are the newly financially included resilient financially resilient uh mr armed are you finding well i would put it on a different way you know so uh these are guys who were firstly on boarded into a technology or into a platform in which education was not given just enough hence they're more vulnerable to a large-scale fraudulent activities you know every company in the last three years or two years who has been in this field wanted to do a large-scale onboarding of of consumers into their platform which are like tens of millions hundreds of millions hundreds of millions you know i mean um if you look at india also you know you see different consumer base being increased uh lot more digital platforms have come inside you know and everybody addressing different problems you know uh but at the same point of time they were not given enough time to have their platform set uh enough time to give out that education to the consumers to use and so on so forth which put up a large-scale opening of of consumer frauds that you rightly set up you know uh but what's the the good thing out you know the good thing is to the factor that since they were onboarded uh now it's a good time for them to be given that kind of financial literacy and at the same point of time handhold them to really start using the platform which could benefit them now being on the platform and being on on things so if you look at the MSME sector as such or the sector today we have a data of a consumer who was never there on the banking network you know uh thus giving a journey to this this particular consumer who can then been taken inside okay so there's always been a talk about public private partnerships and so on so forth i strongly feel that the the the regulators have done a lot in the last decade you know okay so what we require now is to have private private partnerships you know everybody is now becoming more nationalistic where in the same so you know banks are becoming more uh reserved and they are saying that we would like to control the entire space of of of the consumer journey we need more partnerships we need them to partner with new fintechs we need to give them an open new banking has been there there's a conversation that we're having but in in certain economies the banks are still very closed they don't want to open up informations to so for your perspective the opportunity is so large that it the always a dark side to everything but we're still way we're well up and well yeah of course yeah can i play down this idea of a trade-off between digitalisation and safety i don't believe in this trade-off or at least we have many ways to escape it we should make progress in universal access we should also make progress in regulation prevention and education in our case we increase digitalisation of payments obviously but we also increase the safety and it's the most efficient way to to increase access because this idea of a trade-off can be very toxic because you could say i would slow down digitalisation or i would be ready to pay for fraud snows there is no necessity for that and other issue i only mention is the increase with of cyber attacks this one is more serious we should be very vigilant and if the financial system is more digital it could be more vulnerable but if i may say it so far so good if the three months we are today exactly three months after the invasion of Ukraine and we didn't see increase of cyber attacks i touch the wood everywhere and we are very vigilant okay well let me put it another way okay financial services companies the data again we'll come back to the data you know so much about your customers the actuaries know know so much that people lending their money you know more than they may even know about themselves right now that's something that works with some of the most wealthy people in the world when you combine that with just newly financially emancipated some people who are you know numeracy levels and literacy levels might be not be as high as we might think that imbalance seems so huge and and some people's business models involved to some degree exploiting that or am I just a cynical journalist you know wherever there's an opportunity people will try and take it on the negative side but i think it's just been so wonderful to see the amount of interest in ffintech on African continent to try and address some of these challenges okay and also people being so innovative about the ways in which i think traditional banking system has excluded people and finding different ways of how to include people and i think it is kind of that's where the future is i think digital the digital side enables people to also get a holistic view of how people are managing their finances but i think also leveraging technology enables to you to get a way of thinking of incentives to drive the correct behavior so things like for example on middle income customers you realize that actually a lot of people get disheartened with buying insurance because they feel like you know i got this advisor who sold me this product and i never saw them again obviously that's related to the incentives related to upfront commission um what has been great to see is financial service you know in economic ecosystems where they've been incentivizing the fact that the customer holds on to the product for longer and longer because then they get the real benefit of the product and in particular insurance this you see this phenomenon um but also the fact that um you know in in the personal finance business that i was managing what we started to do was also making sure that advisors got to see their customers once a year and that's really important because you want to make sure that yes in the past year if something has changed about this individual you want to make sure that the plan that they have is still right for them and i think what's great about this is that obviously yes you know there's the incentive to focus on middle income simply because they've got more to spend on you and they you can make more money from them if you're a financial institution but actually i think we should be leveraging data to try and make sure that we can actually give in more access to people in the lower income spaces to see that they're also doing the right thing so a big challenge in South Africa for example is a lot of people taking funeral benefits when actually for middle income customers they should be taking life insurance because actually the risk to them is much greater than just what a funeral benefit can provide and you do see this problem where a lot of people are buying multiple funeral policies because they're sort of trying to access a greater amount based on the fact that they want to you know protect their livelihood in the incidence of their breadwinner passing away or something happening to them and you realize there they really need that access point or the data that guides them to say okay you see you're buying a lot of funeral products which actually are very very high margin that's why everybody's piling in to get into that business you should actually be taking out a life insurance product that's actually much lower margin for the business but it's much better for the customer okay um um let's throw this forward well actually let's bring it up to date with the very current situation we've seen pressure on incomes like never before big another big stress test you know in the pandemic there was massive massive support which kind of helped things along now just incomes falling um I don't is this new financial inclusion is it ready is it ready to is it stable enough to deal with a real shock to to the incomes of the newly financial included yes actually um after um you know it's um at the end of last year we um we run a series of uh service with banks in Africa and in other regions of the world and for instance the you know the survey from from Africa which actually confirmed what was just said you know it you know actually the picture that came out of the service that in the end the banking system within the african continent it reacted well to the covid crisis maybe because there was a good capitalization a starting good capitalization and there there were also you know a lot of policy interventions also in other part of the world also the ab the european investment bank provided financial packages to support small and medium enterprises and to support local business what happens now you know actually is that you know everything was based on you know on the assumption that then with the recovery you know you could start a new growth phase and that you know all of these support could have been reabsorbed and also that you know the the local business could have been flourished again now the issue is that what happens to this maybe to the new business which uh you know was created were created during the pandemics or which managed to survive you know how they can cope with that what we see now also talking with you know financial institution local financial institution is that what is more needed now is some sort of risk sharing mechanism you know some incentives that for instance will help to provide continue to provide finance with the lower level of collateral with you know new financial instruments and in this regard i think that there is an evolution that we have to look at since you know actually you know crisis after crisis it can get serious concerns i'm going to put a question immediately to the governor but you know do you remember your questions we've got five or six minutes we've slightly extended this we've got some good questions from the slido too new financial instruments alarm bells maybe start to ring do they perhaps you know i did the journalism on the origins of the subprime crisis in the us there were there were some good intentions there and financially underprivileged people were ripped off and it was it was a bad combination of financial innovation big institutions bad regulation and starting off with an attempt to spread finance are there any you think the systemic benefit of just spreading the financial system is so stabilizing that it counter counteracts any potential problems i think it's a very important question can i link it with the previous one oh yes i think there is a very important link so about the effect of the ukrainian crisis i would share what gelsamina said i'm vigilant but confident on financial institutions themselves they are solid and by the way the next increase in interest rates will help them including the new digital banks because they are very reliant on the value of their deposits and so the level of interest rates another question which brings me to financial innovation is the consequences for people themselves for households and for the poorest one here we must say very clearly that finance and financial services cannot bring all the solutions that kind finance cannot bring miracles and here is a link with your last question if you refer to the subprime it was an illusion and the illusion that everybody could have access to real estate whatever his real income was and it went to a catastrophe you can imagine all the new financial instruments you want including on the saving side be it pyramids be it cryptos be it whatever you want finance will not create value and income for the people per se and if there is a lack of income if there is a lack of growth it refers to fiscal policies to structural policies to the work and genius of individual companies but the ideas that financial inclusion which is very welcome could mean financial miracles in difficult times would be extremely dangerous now we all agree about that in this room but frankly look at what happened with subprimes you are right it was a wrong and very dangerous promise and I there are many lessons to do for from the subprime but for me for me the most interesting one is this kind of political support which was behind the subprimes so some politicians bought and sold this very dangerous financial inclusion no no I was very affected by going into a pastor in Baltimore and it becomes so integrated that the bank was selling mortgages and the church was getting a hundred dollars per mortgage and they were channeling it and so so this is to me about trust and innovation you know I don't want to be negative because I think there's amazing stories here but I guess this is about the plumbing isn't it you guys are plumbers and it's about connecting people not creating miracles in terms of uh life standards and that's but there's enough plumbing to be done you need the sewers need to be created not maybe not the sewers the uh the fresh water supply needs to be tapped into every corner of the world and there's still lots of opportunity there um uh any question anybody want to come in from here before I go to slido um okay um right uh one question here is credit reporting from anonymous acts as the backbone of credit what do you see as gaps in credit reporting and what can tech do for access particularly for migrants and I want to pick that up take it up um so just to take a step back and say that you know see uh the digital inclusion is a great thing you know but one should not forget that there is also a need of an emotional connect at the bottom level um to understanding your consumers you know so because when you move away from not having physical touch points uh you don't get a very clear picture about what your end consumer actually does you know so that's you and the consumer that's me you don't visit them no you've just got a set of metrics about them yeah so every algorithm does not give you a clear picture of your customer you know so it doesn't give you what the customer actually wants you know it could it could take you to a certain level so being digital and moving away from the online I mean on the brick and mortar space most of the times has not helped us you know so there needs to be still a need for a last mile connectivity uh on the bottom level you know physically physically because the algorithms can only go so far we haven't talked about the algorithm absolutely you know so the algorithm I just wanted to put that inside you know so I mean being digital is all great but one should not take that that last mile connectivity of your consumers because then you don't get a real picture of them then you cannot map their financial journey okay so I just want someone to and we've got one minute and we walk around Davos and we see AI this and web 7 this and all that sort of stuff and it creates a massive computing power to try and analyse humans and some of these algorithms you end up paying a lot of money to the cloud people right well they seem to throw them yeah yeah they seem to have the cash here but but the but the but the algorithms uh do they marry with financial inclusion or can they within them exclude I think um there's two sides to it because I think there are some areas where you do see that there's the discrimination that occurs with algorithms that's something that everybody needs to be mindful of yeah and I think an example well um yes there's a big scandal in South Africa where people who literally there's people who've done tests and they will submit the exact same details but their name will be different and if you can infer which cultural group they're from then one person gets a high interest rate on the car loan then the other person so you do see that sometimes when you've coded a particular um uh kind of a way of of deciding who gets credit who doesn't and what interest rate it is sometimes it perpetuates um discrimination in a way that is actually just you know it's just not agree not inclusive at all yeah agree um but I think the the big thing about um leveraging some of this technology is the fact that it can make connections and dots that sometimes we don't naturally see and it can identify who are the people who actually are better credits based on different set of of um criteria relative to what the traditional credit um agencies have been tracking and I think that's the beauty of it that's where we need to kind of think of the fact that the digital world is you know very very vast not only the web three stuff which everybody is kind of really scared about at the moment I'm not I shouldn't be sad dismissive you just want to come in quickly on algorithm could I propose two very simple golden rules and here I take my head as a supervisor of banks and insurance alike so first golden rule is don't use algorithm you don't understand the black box syndrome it looks obvious but believe me it would eliminate many of the algorithms and the second golden rule to bankers and insurance alike is don't sell products you cannot explain yeah and it would have avoided several of the financial crisis you mentioned but believe me as supervisors we will be deadly serious about these two rules right well listen we do have to leave it there we've been on a journey around the world from motorbikes in Indonesia to the cloud three web seven whatever is doing algorithms on people so I sound like my dad now they um but I I but I think nothing can be more important than billions of people having access uh to to the plumbing of the financial system there are some interesting challenges that come with that I'm so glad that all of you when I injected some slight journalistic negativity swamped me with positivity that is that is the Davos spirit but I think we all learn something about where this agenda is going we learn about what's happening in different parts of the world I mean I think we will learn more when this new set of figures come out this seems to be like a great moment on the June the 26th or 7th in the world back the global ffindex numbers will come out showing just how much progress has made and it becomes as more people get connected it becomes even more important so with that thank you to everyone listening back home uh so back in around the world thank you for everyone listening well my i think my mum's listening back home as well thank you to everybody in the audience and thank you so much to both queen maxima who's had to leave and also this fantastic panel uh we've made this issue extremely exciting because it's really really important thank you thank you to take us off you