'Digital payment innovation can accelerate financial inclusion'
In the African continent, 400 million adults do not have bank accounts, out of which 60% (240 million) are women. To combat this inequality, five essential action points were identified to enable digital inclusion of women. Peric, who will participate in the G7 summit, explained, during a presentation in Paris on 24 June, “these include infrastructure, digital identity, regulation, evaluation of the digital diffusion and genre-specific research.”
Peric cited the successful example of M-Pesa – a mobile phone-based money transfer, financing and microfinancing service launched in Kenya – which aided financial inclusion. “90% of the population were covered under the GSM network with a basic mobile phone – not a smartphone. This service by Vodafone allowed people without bank accounts to send and receive money through text messages. This innovation was beneficial especially for women because it helped them manage their household finances and savings better, increasing their financial security,” he said.
While a system like M-Pesa has been successful, there has to be interoperability among the different players to ensure a seamless digital inclusion. “True financial inclusion is when a woman in Africa can use her mobile to receive money, access government aid and salary, access micro credit and make purchases. To ensure that, we need to have strong relations between the government, banks and telecom operators providing digital payment services,” said Peric, who was the chief architect of SWIFTNet, the backbone worldwide secure network currently connecting 8,000 banks and 1,000 corporations, and servicing daily the world economy.
There is also a dire need for digital identification, for which the G7 could help finance World Bank’s ID4D initiative to set up digital identification systems. “Currently, the mobile payment can be accessed without a digital identity. To access additional digital wallet services, digital identification is critical,” he added.
Even as technology evolves, there is a need for financial regulation to keep up. The efforts towards inclusion should also be closely allied global digital strategy, with plans to expand the existing networks. There is also a need for genre-based research to achieve the goal of financial inclusion. “We will be working with donor nations to orient their funds towards these areas to increase financial security,” said Peric.