June 2023 Italien Edition


Month: June 2023

• Basel III: WSBI-ESBG rappresenta il settore finanziario al Summit Finanziario di POLITICO 2
• Tracciabilità del denaro: rivelare i titolari effettivi per contrastare la criminalità finanziaria 2
• Alla CMU servono un rinnovato slancio politico e idee audaci 3
• Il kick-off meeting del CSN chiama a raccolta a Berlino gli esperti di 20 diverse organizzazioni 3
• La centralità dell’EFRAG nell’elaborazione degli standard europei di sostenibilità 4
• Inclusione finanziaria e impatto economico. BRAC Bank: un nome, una garanzia 5
• Oltre i confini: il WSBI agevola la cooperazione tra i suoi associati 5
• Xalq Bank: sull’onda della trasformazione e dell’innovazione 6
• La mission che ci ispira è soprattutto una: agire come promotori di un cambiamento
positivo e permanente 7
• WSBI lanza tres nuevos subgrupos de trabajo 8
• BSB promuove una cultura del risparmio inclusiva

Leggi la versione digitale

More publications

Financial News & Views: December 2022 Edition


Month: June 2023

• New year message from WSBI-ESBG Managing Director (Page 2)
• WSBI’s president interview with The Banker (Page 3)
• World Savings Day 2022 (Page 3)
• The internal cards market in Europe from 2002 to 2020 (Page 4)
• A Female approach to financial education (Page 5)
• The very real challenge of cybersecurity and how to face it (Page 5)
• The 28th African Regional Group Meeting in Cape Verde (Page 6)
• ESBG welcomes Deputy Governor of the National Bank of Ukraine (Page 6)
• CMDI framework review: An evolution rather than a revolution (Page 7)
• Scale2Save: What a journey it has been! (Page 8)


More publications

March 2023 Edition


Month: June 2023

• Institutional News (Page 2)
• Financial and economic education – are we there, yet? (Page 2)
• Interview with the ESBG President (page 3)
• Conference in Colombia to highlight the WSBI network’s value (Page 3)
• An Overview on LAPO: From creation to WSBI Membership (Page 4)
• A deeper gaze into the Amonatbonk of Tajikistan (Page 5)
• Global Forum on Remittances, Investment and Development (Page 5)
• Number of unbanked adult EU citizens more than halved (Page 6)
• Unlocking the potential of financial data (Page 6)
• EU-China Cooperation in Green Finance (Page 7)
• ESBG Roundtable on Retail Banking Fraud (Page 7)
• Advocating on the EU deforestation regulation (Page 8)
• WSBI-ESBG launches Cybersecurity Network (Page 8)


Joint Industry Statement on the EU Retail Investment Strategy

On 24 May 2023, the European Commission unveiled the most extensive reform of the EU legislative framework for retail investment to-date. As representatives of the European financial and insurance sector, we (AMICE, EACB, EAPB, EBF, EFAMA, ESBG, EUSIPA, Insurance Europe) are still assessing the full range of impacts and changes put forward in the Retail Investment Strategy (RIS) across multiple pieces of regulation: MiFID II, the Insurance Distribution Directive, the UCITS Directive, the Alternative Investment Fund Managers Directive, the PRIIPs Regulation and the Solvency II Directive. Ahead of the completion of our full analysis, we wish to already make some high-level remarks and set out our initial reasons for concern about the proposals.

We strongly support the objective of boosting retail participation in financial markets, and are appreciative of the European Commission’s comprehensive work in this field. In particular, we are pleased to see the encouraging shift towards ‘digital-by-default’ communication, as well as the effort to streamline disclosures and to further promote financial literacy.
However, we note that many measures in the proposals are far-reaching and raise multiple concerns.

1) Although the Commission declared it had abandoned its original plan to fully prohibit commissions in the distribution of investment products and insurance-based investment products due to potential disruption to the market, there are many prohibitions to the payment of commissions in the RIS proposals, and these would still have major disruptive consequences for the European financial sector and consumers’ access to investment and insurance protection.

We also hold substantial reservations on the new “best interest of the client” test. The proposed approach, which disproportionately focuses on costs, may lead clients to prioritise the “cheapest” product over others that could potentially offer them greater value. We note that such an outcome would be, in fact, contrary to the client’s best interest.

2) The significant number of new processes, policies, organisational requirements, technical disclosures and compliance obligations introduced by the proposals deviates from the stated goals of i) reducing the information overload on clients, and ii) making access to financial services simpler. In fact, the overwhelming volume of requirements adds complexities that are highly likely to discourage consumer engagement, as the laudable ambition of turning European depositors into investors would be impeded by an even longer, more complex and more burdensome investment process.

3) The proposed introduction of one-size-fits-all, quantitative “value for money” benchmarks contradicts the core goal of the investment process, which is to offer tailored solutions to different clients’ needs. Indeed, value encompasses more than just costs and has diverse meanings for different consumers, depending on their circumstances, objectives and personal values.

Not only would such a benchmarking exercise be extremely complex to execute, with limited benefits for clients (a cost-centric rather than investor-centric approach), but it essentially establishes a regulation-driven price intervention into capital markets. We therefore question the need, legal basis and consequences, in particular in terms of market competition, of such a policy choice. Additionally, pricing intervention through benchmarks would pose significant threats to the development of innovative products, especially in the many emerging investment areas that lack historic price data, and would not be compatible with the ongoing efforts to foster a more sustainable offering. All of this will clearly have a detrimental impact on the international attractiveness of the EU’s capital market.

4) We are equally concerned about the unfeasible timeline for the implementation of the new requirements. The industry needs adequate time to apply any new requirements in the millions of diverging contractual relationships it holds with retail investors and customers. Hence, the timeline needs to carefully consider the point at which all the necessary Level 2 specifications and national provisions are published. At present, the transposition dates proposed in the current draft would make it impossible for the industry to comply, as it can already be predicted that by then not even the Level 2 specifications will have been published.

As the financial and insurance industry representatives, we remain fully committed to contributing in a constructive manner to the debate over how to empower retail investors. We will continue this dialogue with the EU institutions and are keen on further discussing the proposed measures once we have completed our assessment.

Download Complete Statement (pdf)

From the Press Corner

Ignitest EuropePolitico

Your contact:
Ines Scacchi-Principal Advisor
e.: ines.scacchi@wsbi-esbg.org
t.: +32 2 2111147
m.: +32 0490 42 65 99


ESBG reiterates its recommendations for the trialogues on the Banking Package towards the Council and Parliament

At the end of May, ESBG reiterated its recommendations for the trialogues on the Banking Package (CRR/CRD) towards the co-legislators, including Members States, the Council Presidency, the Parliament’s Rapporteur and Shadow Rapporteurs as well as the Commission. These recommendations were developed within the ESBG Task Force on Basel IV and first shared earlier in March 2023 at the beginning of the negotiations.

Ahead of the last two political trialogues scheduled on 6 and 15 June, the positions of the Council and of the Parliament differ both in principle and in substance on several issues, including the level of application of the output floor, Fit & Proper, third country branches, provisions related to operational risk, NPLs and ESG. In some areas a compromise can be found while in other ones an accommodation will be difficult as the issues are more of a binary nature.

For what concerns the output floor, it should applied as outlined in the Basel text, i.e. at the highest level of consolidation, hence the Commission’s proposal would be the preferred solution. As an alternative, the Council’s approach for a consolidated application at Member State level is to be supported. The EP wording is less welcome since it is particularly unclear because it does not clarify whether it targets cross-border groups, it suggests that supervisor could also adjust the Pillar 2 at its own discretion, and it extends the topic to the review of existing liquidity waiver.

On Fit & Proper, the proposed suitability assessment must consider national differences in the design of company law and corporate governance in the European banking landscape. In this respect, we strongly support the Council position proposing to delete Articles 91a and 91b CRD. The particularly important exception for institutions that have no influence on the selection of members (Article 91 (13a) CRD) in the proposal of the EP should be kept. It’s important that the timing of the internal suitability assessment is not specified. Moreover, the assessment of key function holders by the authority should be deleted as these are not members of the management body but employees.

ESBG will continue to closely monitor and influence the trialogues in the final phase on the basis of its recommendations and through bilateral talks with the co-legislators. A political agreement may be expected by end-June 2023 but depending on the outcome of the next political trialogue.

Your Contact:
Roberto Timpano-Principal Advisor-Prudential Policy and Supervision
e.: roberto.timpano@wsbi-esbg.org
t. : +32 2 211 11 66

The full list of recommendations


News from South Asia

The name ‘BRAC Bank’ is synonymous to financial inclusion and meaningful economic impact

BRAC Bank emerged in 2001 with the vision to deliver banking for the unbanked small and medium entrepreneurs (SMEs). Inspired by its parent organization BRAC, world’s largest NGO, BRAC Bank innovated and implemented small ticket loans for the grassroots entrepreneurs under the umbrella of formal banking service. Presently almost 58% of the bank’s total lending portfolio (BDT 370,890 million) is comprised of small and medium enterprises. BRAC Bank started its journey with a vision different from any other conventional bank in Bangladesh. Building a socially responsible financial institution towards a poverty free Bangladesh is at the core of its corporate vision. The founding visionary leader Sir Fazle Hasan Abed KCMG realized the impacts of bringing deprived SME sector under banking umbrellas towards the national economic reinforcement.

In times of transformation, few banks have emerged with several technology driven banking solutions to fast-track the national financial inclusion effort under prudent directives and support from the central bank (Bangladesh Bank) in Bangladesh. BRAC Bank championed SME Banking and mobile financial services (through its MFS subsidiary bKash) for rural financial inclusion under the auspices of Bangladesh Bank. Currently, the bank is extending full range of banking services to the last mile SMEs and retail customers across the country with a fast-growing network of 187 branches, 460+ SME Unit offices and more than 450 ATMs /CDMs along with 1000+ agent banking outlets.

BRAC Bank pioneered and championed in facilitating access to banking for developing a vibrant SME sector.

BRAC Bank’s unique SME Banking initiative caters access to market and access to finance to the cottage, micro and small enterprises that were previously ignored by the traditional commercial banking system. Bank provides capacity building supports and loans to small and medium industries for business expansion, working capital arrangement and capital machinery procurement. Being country’s largest financier of unsecured loan with deep rural penetration for small business financing, BRAC Bank has created more than 1.5 million direct new employments. The bank has been contributing significantly to the socio-economic development of Bangladesh since its inception. It has disbursed more than BDT 1 trillion to more than 1 million SME entrepreneurs across the country. To be able to bring impactful outcomes, , the bank built partnerships with the regulator, the Central Bank of Bangladesh the SME Foundation, World Bank’s International Development Association (IDA) and the Asian Development Bank (ADB) in relation to the repatriation fund for the development SME sector. A number of schemes and programs have been designed and implemented to enhance the capacity of targeted entrepreneurs. BRAC Bank ranked top for successfully disbursing the loans amount of more than BDT 30,000 million to 30,500+ cottage, micro, small and medium enterprises (CMSMEs) under various stimulus packages by the central bank during the pandemic period.

BRAC Bank has adopted a digital banking strategy for going beyond banking and greater digital financial inclusion

BRAC Bank has launched the country’s first digital banking super app ‘Astha Lifestyle’ to foster digital banking landscape through an enhanced end to end digital customer experience. Over the past years of pandemic, Astha app evolved from a simple digital banking app to a digital lifestyle platform to address the increased expectation of personal finance management from its digital native customers. Number of Astha users sharply increased over the past few months. More than 50,000 SME customers out of total 300,000+ Astha users are using this digital banking super app for their daily banking needs.        

BRAC Bank has recently launched the country’s first ever digital loan app named ‘Shubidha’ which allows customers to apply and get instant approval for digital retail loans from anywhere in Bangladesh. Loans are issued against any purchase from customers through Shubidha app at the bank’s partner outlets and disbursed digitally into partners’ account in a few moments.  This will facilitate a one-stop platform for loan-related solutions.

Without these digital banking apps, a customer may not have access to the tools and features which help to take control over financial life. It also offers benefits beyond banking, connecting the bank to a community and banking opportunities. BRAC Bank perceives digital banking isn’t an all-or-nothing situation. A customer can transact digitally part-time to take advantage of its benefits and still visit a branch, ATM and agent banking outlet. It’s all about to provide a hybrid or ‘phygital’ solution that fits well to habits and needs of a banking customer from local context.

BRAC Bank is committed to its rapid expansion in Agent Banking for reaching the last mile

BRAC Bank launched its agent banking Service in September 2018, with an aim to cover every corner of Bangladesh with state-of-the-art digital financial service solution and compliment BRAC Bank SME business strategy. It has accomplished the 1000 agent banking outlet milestone to mark its commitment for making the rural economy more vibrant. The growing agent banking channel now serves almost 250,000 unbanked people from rural and semi-urban geographies. As per the central bank latest report  on agent banking BRAC Bank ranked top with the largest volume of lending BDT 64,589 million which represents 63% of the total loan disbursed in Agent Banking industry as a whole. BRAC Bank agent banking channel alone performs monthly 350,000 transactions of BDT 20,000 million. Over 40% of all these transactions take place beyond conventional banking hours and on weekends and holidays.

Making women bankable is a priority for BRAC Bank

BRAC Bank has been working through its SME Banking across the country for the financial wellness of women entrepreneurs since inception. In 2017, it launched TARA, the first women focused sub-brand of banking service in Bangladesh. TARA offers savings accounts with higher-than-average interest rate, savings solutions, current accounts for women entrepreneurs, business and retail loans with privileged rates, reduced processing fees and dedicated customer services. TARA also affords capacity building and business networking supports to the grassroot women entrepreneurs. It has acquired more than 270,000 women customers in the category of micro-entrepreneurs and individual retail TARA customers. BRAC Bank intends to develop a banking ecosystem for women from a responsible or sustainable finance perspective by engaging its three vital banking channels SME, Retail and Agent Banking. BRAC Bank to intervene ‘making women bankable’ with more focus and different marketing strategy. Babson College, USA and Dutch investment firm, FMO, partnered with BRAC Bank to deliver a first of its kind capacity development program for women entrepreneurs.

Changing the image from a lender to a banker through access to market, access to finance and capacity development for target entrepreneurs.

Commercial banking is nothing but gaining the trust of customers by providing them effective solutions for managing their money. BRAC Bank SME Banking has been working with various online platforms for cottage, micro, small and medium enterprises (CMSMEs) to facilitate access to market and industry networking. It also aims to introduce new digital lending solution ‘SME e-Loan’ as a means of digital financial inclusion. The purpose of BRAC Bank’s movement towards digital lending for CMSMEs will be focused on:

  • Access to finance for cottage, micro and small enterprises (CMSEs) and image of innovation for bank
  • Reduced turn-around-time for loan processing
  • Relatively lower interest rate by reducing operational cost
  • Financing for income generating activities, development of livelihood and to meet working capital requirement.
  • Convenient loan application process without any visit to the bank offices or branches
  • Less intervention of bank’s human resources and ensuring service to large number of clients

In 2022 BRAC Bank had conducted five different 3-day training programs in five non-metro areas of Bangladesh comprising 150 rural women entrepreneurs. The impact of these training resulted 37 entrepreneurs to be enrolled in banking transactional account and 13 with financing facilities. A good number of proposals are currently under processing for loans. Recently the bank launched the country’s first of its kind premium banking service ‘Borenno’ which offers a bundle of specialized banking services for SME priority customers to fulfil their needs and choices for regular day to day banking. This unique product will help SMEs adopt a proven money management behavior for safe investment and savings strategies.

BRAC Bank being a private commercial bank for inclusive finance has been collaborating with a number of development partners towards achieving the Sustainable Development Goals (SDGs). Also, the collaboration has been extended up to 20 different partners in different capacity within financial inclusion space. So far BRAC Bank partnered with different projects of U.S. Agency for International Development, former Department for International Development, now Foreign, Commonwealth and Development Office  , International Finance Cooperation, d, Dutch entrepreneurial development bank , Swisscontact, ACDI/VOCA, UNCDF and so on for implementing different projects throughout the country with a proven track record of achieving the targets and commercializing the learning from every project. It has achieved a number of global awards and recognition like ‘Best Bank for SMEs’ by Asiamoney and ‘Data Champion Award’ from Financial Alliance for Women and ‘Best Bank for Women Entrepreneurs’ by IFC and SME Finance Forum.

In conclusion, remembering a quote from Sir Fazle Hasan Abed that has been shared by others many a time: “Most organizations are not ambitious enough. They are content with achieving small goals-serving 100 people instead of 100 million.” He founded BRAC Bank with a vision of large-scale impact by serving the deprived SMEs and unbanked population across regions.




By Jakirul Islam

Jakirul Islam is a Senior Vice President in SME Banking from BRAC Bank Limited

ESBG’s official statement on the recently issued Retail Investment Strategy package

BRUSSELS, 1 June 2023 – ESBG is fully committed to actively support the development of retail investment in the EU. While we welcome the ultimate purpose of the Retail Investment Strategy to “enhance retail investors' trust and confidence to safely invest in their future and take full advantage of the EU's Capital Markets Union”, we believe careful attention should be paid to several aspects of the proposal

We appreciate that the European Commission has decided not to fully prohibit inducements for the distribution of financial products. In the proposal itself it is recognised that such a move would have a “potential disruptive impact” for the European financial sector. However, we believe that the ban on inducements for advice free transactions remains a problematic topic, which needs to be reconsidered.

We oppose an undifferentiated ban on inducements for all advice-free transactions. A ban on inducements for non-advisory transactions together with the extension of the obligations for such transactions is too far-reaching and not proportionate. Except for the suitability test the regulatory obligations are nearly the same for advised transactions and for non-advised transactions. It therefore needs to be clarified that non-advisory transactions for which an appropriateness test is mandatory are not covered by the inducement ban but only Execution-Only-Transactions where no obligations for exploration exist (ESMA also differentiates between execution only transaction and transactions without advice in its guidelines).

We would further like to express our deep concerns regarding the proposed “Value for Money” approach, as the proposed pricing processes and the development of benchmarks through additional reporting requirements would distort competition and hinder innovation; the mentioned benchmarks are not the right way to assess the quality of investment products and the real added value they provide to customers and investors.

Overall, the proposal does not seem to reach the right balance in terms of consumer protection enhancement and of the increase of trust, confidence, and participation of retail investors in capital markets. In our view, given the impressive number of new processes, policies, organisational arrangements and obligations, it departs from the goals of reducing information overload to clients and making financial services more approachable.

More regulation and disclosure requirements will for sure result in increased costs for all participants in the retail investment market and not necessarily lead to more protection for the consumer nor to more participation as adding complexity is rarely productive in this context.

ESBG will provide constructive feedback on the proposal in the open consultation and looks forward to achieving a balanced framework.

Download (pdf)

Ines Scacchi
Principal Advisor-Capital Markets
Phone: +32 2 211 11 47