 Gweithio. Thank you and welcome both here at the forum in Davos at the World Economic Forum to this important session, Financial Inclusion, addressing the largest gaps. Welcome to our audience online across the world. This is obviously a really vital global issue. There is obviously a tremendous amount going on in the world right now and it is toweringly important as the geopolitical situation and the energy and food price shocks are. Roeddwn i'n meddwl i chi'n gweithio ar y dyfodol ychydig ar y cyfnod ar y cyfnod i'r cyfnod i'r cyflwyno. Roeddwn i'r cyfnod i'r BBC yn Llywodraeth, yng Nghymru, y cyfnod ffintech ym Mhwylwyr. Roeddwn i'n meddwl i'r West Bengal yn India, a rydyn ni'n gobeithio ar y cyflwyno ar y cyflwyno a'r ymddangos o'r cyflwyno sloed ymgylch. Cwestiynau y gweithydd i'r gwaith yma yn yw lai o'r cyfan o'r cyfan hwn yw'r cyfan, gan gyda'r gaelio'r gwaith i'w mlyneddau o leol ffordd. Felly oedd y bydd y cyfan o'r rhaglen nifer o adon, felly oedd yn iawn, i ddefnyddoedd y cyfan fขoedd undeidio mynd i ni rydym yn cynnig o'r cyfan na phryd, I'm getting ripped off by and embourished by semi evil middle men who now have that market-pricing power, or the female entrepreneurs lacking the capital, the ability to borrow the migrant that's pioneered next door, from West Strangol yn Bagnadd源s by Professor Eunice through forums such as these enormations refracted not just from the West Cape system developing countries but from developing countries fel hyn cyfathio addysg gyda unrhyw gyrach. Ond oherwydd, mae'r cyfrifio ar gyfer y cynllunion maen nhw'n ystod. Mae'n unrhyw o fel y cyfrifio ar hynny-i Gannu yn Llyfrgell Gwrthog. Felly, os ydych yn malol ar gyfer y prifor ac mae'r hyn sydd yn gallu gilydd. Yna, dyna gael yn fawr y brifer sy'n ei wneud. Mae'r ragwch sydd, y lefithau gwirlo hanfodol, sy'n ddyleno'i lle llawer y sylwedd sydd i myfennu o unrhyw ym ni'n myfyn ifennyddio'r bobl. dyma'n gwlad a llwyddo llwyddo i'r ystyried o'r ffordd yw'r cyfrifiadol yma, a wnaeth ag i gyd yn y ffwylio eich gwlad â'r gwaith digidol yma oherwydd mae'r cyfrifiadol yma yn y cyfrifiadol yma? Felly, mae'r ysgrifennu ei wneud o'r line yw eu gweithio, mae'r gweithio i slydo.com a'i gweithio ffynlusion ffynlusion a pwyllwch ddaeth y middle yn Ysgrifftau esses. Felly mae'n gallu'n rhan o gael â'r pethau sydd gyda'n meddwl yn ddaeth ei gwasanaeth ac mae'n gael i gael i fynd amser yn y rhan o'r panel. Mae'n ysteadach am y panel, a fel ysteadach mae erbyn â'r unrhaed Brachol, roeddwch yn y ff讓 â'r Maeg ôl, yng Nghymru Gweithgwyr Fyrwyr, yng Nghymwyr Fyrwyr Speciall Ysgrif Syddfaeth Fyloedd Fynanc i fynd y Ff alorswyr. that 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 sat down in slow motion slideshow because it is true you see if you're there you don't realize so much has changed and we have come together at a very defining moment. As this global pandemic has kept us apart for two years I'm very happy I've just arrived to be here back again Mae'r cyfnodau sydd yn cyfnod o'r cyfnod ar gyfer a'r gweithio ymgyrch, sy'n cyfnodd y 19 yw'r cyfeirio ar gyfer y gweithio gwybodaeth yng Nghymru, yn ei gwyfod ar gyfer y tîm ymlaen ymlaen. Mae'r gweithio, mae'r cyfnodd ymlaen ymlaen, yn gallu cyfrifio unig o'r gwahen a'r gyfrifau o'r cyfrifio. Mae'r cyfrifio ar gyfer y cyfrifio ymlaen yng Nghymru o'r cyfrifio ymlaen, mae arnynt 50 miliwn o'r adolygiad yn gweithio'r pethau digital. Y dweud y ddweud yn ysgrifennu am Ysgrifennu Sarmddiol, yna'r newid yng Nghymddiad Llywodraeth yn ymddiol, ond byddwn ni'n dweud ydy'r 1.2 miliwn o adolygiad yn gweithio'r adolygiad yn y ddechrau. A fyddwn i'n gweithio'n gweithio'n gweithio'r adolygiad yn ymddiol. Yn ymddiol, mae'n fydd ymddir i'r adolygiad o'r adolygiad, iawn, mae'r a keyf, ddwy'r ddweud sy'n dweud i ddweud y rhaglen yng Nghymru sy'n dweud. 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 in former ones and those owned by women. Mae'r cyfnoddau yma wedi'i gweld ar gyfer pen tu a cyfnodd yn ymgyrch yn ymgyrch yn ei ddweud o'r lluniau a'r rhan. A oedd oedd y G20 Lleodraeth yn Rhôl yn yn ymgyrch yn gwneud yn cyfnodd y Gŵr Ddechrau i'r hyn o gweithio cyfnodd cyfnodd cyfnodd cyfnodd yn ymgyrch yn ymgyrch. Mae Digital can open new markets and have businesses more efficient. A Digital Ecosystem can help small businesses better manage their 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 in 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 and insights on customers can also help you design products that influence financial behaviors for the better. Saving products that nudge 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 for joining us. I know you have to go on. 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. 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, Central Bank of France, François Villore de Gaill. And then we will have in a second Gelsamina Villiotti, who is just going to replace his sheets. Thank you, Gelsamina. Thank you very much. Who is from the European Investment Bank and a former senior official in the Italian Treasury. Then we have Andre Solistio, the Chief Executive Officer of the Go To Group in Indonesia. We have Edim Ahmed of the Lulu Financial Group in the UAE. And then we have Karabo Morule of Capital Art, who is a, who was an actor. Or he still is an actor. I don't think you ever lose being an actor. But now runs a very interesting, the Capital Art Project, which is trying to refashion how people treat African arts. So, again, keep those questions coming on Slido. Let's begin with you, Karabo, about the, 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. 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 Old Mutual, which is a large financial services conglomerate in South Africa, focusing on middle income customers. And you start to realize that even when we think, yes, people who are in the middle income know everything about finances, you start to realize 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 women specifically. And they've been doing a great amount of work to focus on people who are in low income, making sure that 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 their account for savings, which a lot of people then aren't normally able to, 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 totally forgot about insurance. And of course, insurance is like the most fundamental protective barrier for people against calamity and there's plenty of calamity around at the moment. Encourage all of you, you know your territories and your markets, give us an insight into the data, how much it's spreading, how it's changing savings culture or borrowing culture. Let's go on to Mr Ahmad's perspective from the UAE. Sure. So we're an UAE-based entity but we spread across 10-odd countries, so GCC, Indian subcontinent and Asia Pacific. I'll take the example of two countries, one is UAE and one is India, of course, where we have large presence out. 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 whole demographic of the GCC countries. You will find that around 80% of the population is an expatriate population and they work there to send their money back home. So how do we get these money back into the accounts of people out in the most effective manner, the shorter period of time and the most cost-efficient manner out? That becomes the first chain. And the second chain about where we try to identify is to create a customer experience journey out, where we kind to understand where this money is used so that on the other end of the customer journey we try to give them micro-loans and financing and so on and so forth. The biggest challenge that we have faced on this side 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 with coming out of ADAR, which is an identity proof today covers around 90% of the population in India, has really helped us to really fast-track that journey out. And also with the unified payment network that has now come to play in India which has really, really helped in terms of making sure that 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 the 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. So all 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. 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 data has also further helped in making sure that 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 and the US we borrow and in Korea they save. In India, I just can't really quite... Are your new customers, your newly included customers, are they savers or are they borrowers? It depends on which generation they are from. So it's a generation. It's the same model. It's the same model. The younger generation are, yes, they are more on the spending side of things. The earlier generations are things. But a very interesting aspect that we've recently found out is how the migration pattern has changed. 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 subcontinent, sells everything that their parents have made and bought the money outside the country. So there is also a reverse flow of funds that are happening at this point of time. Because of larger level of globalization that is happening and people moving out of the country as well. 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 and so forth. Or the ability for you to work from anywhere in the world. And need not to be in one particular junction. You two have already proven to me that 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 audience about them and tell us about the marketplace. Yeah, sure. So we're, I'm from Gotoo. So we have a few products. One is a Gojek, Tokopedia, e-commerce and also on-demand services. One of the interesting thing that we've actually experienced is that 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 Gojek and Tokopedia as well. Seven years ago, in Gojek cases, we actually serve what we call the Ojek community, which is an informal motorcycle driver 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. Similarly on Tokopedia, 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 Tokopedia, 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 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 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 it becomes a track record. That wasn't there before. If they go to a bank, they will be rejected because you don't have a track record. We do and therefore a lot of the development is actually to help them, for us to use those data to then 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 motion 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 that's just a one-story part of it. 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 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 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. What I take from you is amazing innovation and creativity in targeting a financially excluded group that is critical to the way that the economy works and expanding from there. 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. Very, very interesting. So moving on to Jelsa Mina. From a European perspective it's obviously different. The market's more developed but you help fund those people who continue to be excluded in the EU and some development projects outside as well. Yes, definitely. First of all, thank you for having invited me to this panel for the reason you mentioned the very beginning that I came from the Italian Treasury. Actually I joined the European Investment Bank last year after that I ran the final strike of the G20 and actually 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 there is widespread recognition that providing access to finance is an opportunity to grow to be inclusive and so in this regard it's something which is very relevant to my career and also to DAIB. At DAIB 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 8 and 10 billion outside of the European Union and where we invest I would say that we go from large infrastructure which are important for the for the economies and also to the financing of SMMIS actually SMMIS is at the very centre of the activity of the European Investment Bank inside 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 outside of the European Union actually to start a business in a difficult environment in fragile economies you need you know 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 create a business case actually what is not it's all important to have access to finance but also to have it's a business case to be financed and actually I think that what is most important is the access to finance also providing the skills and the ability to create a business case because very often when you have a business case it's much easier to get finance for a sustainable investment because in the end once that you start an activity you need also to run it and to get it sustainable so outside the Union we have several examples and I like to pick one of the example bringing the insurance case actually we invested in a fund as I said we go through financial intermediaries through funds and actually we invested 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 especially within the agriculture sector we know how relevant it's a farmer can be safeguarded with respect to the impact of extreme climate in Jordan we finance access of women to finance it's a fund which is completely dedicated only on women and we have a very interesting case also within the European Union with the Roma community 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 is an instrument whose motto is we believe in small which is dedicated 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 business so there are many underserved groups also within the European Union and we have to look also at the way in which we can provide a social impact and finance can also provide the opportunity to create a social impact and especially if you provide people the right instruments and the right skill to prepare their case and to access finance and this regard for instance we also provided online course on financial inclusion so that you know through a direct access to our website there could be the opportunity to have information and to have a 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 I'll continue with one more easy question for the governor in terms of how it applies in a developed country such as your own in France before we get a bit tougher better go 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 ffindex figures are but to give you very impressive figures for Africa under your control ten years ago in 2011 less than a quarter of African people had access to financial services we hope that by the next ffindex more than half will have access in ten 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 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 ok no I come 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 we are in charge of over indebtedness if we help some poor families to manage better the budget we will have less over indebtedness 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 is 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 specialist ECB watchers 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 are 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 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 a 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 also to say which will become systematic it's a huge change and second gamification 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 we've given you a broad vista now what I'm fascinated by and I want the whole panel to respond to this 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 we can all be very happy and smiley about how the great opportunities of this agenda but let's be clear the Covid pandemic I don't know about your country but in the UK saw a massive exponential leap in fraud and scams on the most vulnerable people and there's a flip side to including people which is some of the dangers 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 what lessons do you draw from the data about the financial behaviour of some of the newly included who wants to go first maybe Andre yeah so just sharing some experience I think during the pandemic one of the positive thing and again a lot of the perspective from our side comes first from the MSMEs and then let's talk about the consumers 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 either through our e-commerce or food delivery for food merchants and stuff is to be able to help them to onboard very quickly so easily so that anyone can actually start to test the case and we saw a couple of millions of new additions into the system so the market opportunity there was the main factor and that actually was a saving grace if you may where a lot of the income that was lost now gotten back because of that opportunity we also see a lot of people, folks who actually lost their job started becoming an entrepreneur and these platforms make 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 I'm not trying to be a journalist trying to create control but let me give you an anecdote and we'll spread this out I remember when mobile phones the story I told you about West Bengal 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 and guess what they were charged 10 rupees that sort of stuff happens too in barely literate or newly literate populations and newly financially included populations are the newly financially included resilient financially resilient Mr Ahmed are you finding I would put it on a different way 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 every company in the last three years or two years who has been in this field wanted to do a large scale onboarding of consumers into their platform tens of millions if you look at India also you see different consumer base being increased a lot more digital platforms have come inside and everybody addressing different problems but at the same point of time they were not given enough time to have their platform set enough time to give out that education to the consumers to use and so on which put up a large scale opening of consumer frauds that you rightly set up but what's the good thing out the good thing is the factor that since they were onboarded now it's a good time for them to be given that kind of financial literacy at the same point of time to really start using the platform which could benefit them now being on the platform and being on things so if you look at the MSME sector today we have a data of a consumer who was never there on the banking network thus giving a journey to this particular consumer then being taken inside so there's always been a talk about public-private partnerships I strongly feel that the regulators have done a lot in the last decade what we require now is to have private-private partnerships everybody is now becoming more nationalistic where in the same banks are becoming more reserved and they are saying that we would like to control the entire space of the consumer journey 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's been happening but in certain economies the banks are still very closed they don't want to open up information so the opportunity is so large there's always a dark side to everything but we're still well up 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 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 of cyberattacks 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 cyberattacks I touch the wood everywhere and we are very vigilant ok let me put it another way financial services companies the data again you know so much about your customers the actuaries know so much the people lending the money you know more than they may even know about themselves 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 not be as high as we might think that imbalance seems so huge and some people's business models involved to some degree exploiting that or am I just a cynical journalist you know wherever there is 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 infintech on the African continent to try and address some of these challenges 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 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 behaviour 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 sold them again obviously that's related to the incentives related to upfront commission what has been great to see is financial service you know 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 and in particular insurance you see this phenomenon but also the fact that 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 you've got more to spend on you and 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 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 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 protect their livelihood in the incidence of their breadwinner passing away or something happening to them and you realise they really need that access point or the data that guides them to say okay I see you're buying a lot of funeral products which actually are 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 that's better for the customer okay let's soon 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 another big stress test in the pandemic there was massive massive support which kind of helped things along now just incomes falling is this new financial inclusion is it ready to is it stable enough to deal with a real shock to the incomes of the newly financial included yes actually after at the end of last year we ran a series of surveys with banks in Africa and in other regions of the world and for instance the survey from Africa which actually confirmed what was just said 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 capitalisation a starting good capitalisation and there there were also you know a lot of policy intervention also in other parts of the world also the European Investment Bank provided financial packages to support small and medium enterprises and to support local business what happens now 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 these support could have been absorbed and also that you know the local business could have been flourished again that what happens to this maybe to the new business which you know was created were created during the pandemic so 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 collateral with you know new financial instruments 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 consequences I'm going to put a question immediately to the governor but you know do you remember the questions we've got five or six minutes we've slightly extended this we've got some good questions from the Slido too 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 some good intentions there and financially underprivileged people were ripped off and it was a bad combination of financial innovation big institutions bad regulation and starting off with an attempt to spread finance are there any do you think the systemic benefit of just spreading the financial system is so stabilizing that it counteracts any potential problems I think it's a very important question can I link it with the previous one because I think there is a very important link so about the effect of the Ukrainian crisis I would share what Gelsa Mina 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 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 bit pyramids bit cryptos bit 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 idea 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 the subprimes but for me for me the most interesting one is this kind of political support which was behind the subprimes so some politicians both and sold this very dangerous financial illusion I was very affected by going into a pasta in Baltimore and it becomes so integrated that the bank was selling mortgages and the church was getting $100 per mortgage so this is to me about trust I don't want to be negative because I think there are 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 life standards but there's enough plumbing to be done the sewers need to be created the fresh water supply needs to be tapped into every corner of the world and there's still lots of opportunity there anybody want to come in from here before I go to Slido right one question here is credit reporting from anonymous acts as the backbone of credit what do you see as gaps in credit reporting what can tech do for access particularly for migrants anyone want to pick that up take it up so just to take a step back and say that the digital inclusion is a great thing but one should not forget that there is also a need of an emotional connect at the bottom level understanding your consumers because when you move away from not having physical touch points you don't get a very clear picture about what your end consumer actually does so that's you and the consumer you don't visit them you've just got a set of metrics about them every algorithm does not give you a clear picture of your customer so it doesn't give you what the customer actually wants it could take you to a certain level so being digital and moving away from the online on the brick and mortar space most of the times has not helped us so there needs to be still for a last mile connectivity on the bottom level physically because the algorithms can only go too far we haven't talked about the algorithms I just wanted to put that inside being digital is all great but one should not take 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 so I just want someone to we've got one minute 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 they seem to throw them they seem to have the cash here but the algorithms do they marry with financial inclusion or can they within them exclude 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 and that's something that everybody needs to be mindful of and I think well 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 and the other person so you do see that sometimes when you've coded a particular kind of way of deciding who gets credit, who doesn't and what interest rate it is sometimes it perpetuates discrimination in a way that is actually just not inclusive at all yeah agree but I think the big thing about 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 but it's based on different set of criteria relative to what the traditional credit 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 very very vast, not only the web 3 stuff which everybody is kind of really scared about at the moment I shouldn't be said dismissive Yr cyfnall, you just wanted 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 the first golden rule is don't use algorithm you don't understand it's a black box syndrome it looks obvious but believe me it would eliminate many of the algorithm and the second golden rule to bankers and insurance alike is don't sell products you cannot explain 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 3 web 7 whatever it is doing algorithms on people so I sound like my dad now but I think nothing can be more important than billions of people having access 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 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 and 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 26th or 7th from the World Bank the Global Findex 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 sorry back in around the world thank you for everyone listening well I think my mum is listening back home as well thank you to everybody in the audience and thank you so much to both Queen Maximo who has had to leave and also this fantastic panel we've made this issue extremely exciting because it's really really important thank you