Resolution of the WSBI Annual Meetings
Bangkok, Thailand, 30 June – 1 July 2016
Retail Banking in the 21st Century
Members of the WSBI, comprising savings and retail banks from around the world, gathered in Bangkok at the invitation of Thai WSBI member Government Savings Bank (GSB) to discuss "Retail Banking in the 21st Century" at their annual meeting.
They concluded that:
- Traditional business models and revenue streams are being quickly reshaped by customer expectations of instant online connectivity around the clock. Technology is changing anthropology: to match changes in customer behaviour, savings and retail bank staff will need to develop a culture and skills to service these always-on customers. Innovation and digitisation are essential tools to improve the customer experience in such an environment.
- Adopting a digitised banking universe can also help savings and retail banks achieve their longstanding commitment to financial inclusion, a catalyst for seven of the United Nations Sustainable Development Goals (SDGs) under the 2030 Agenda for Sustainable Development.
- Digital payments form an important part of an "always on" banking universe. Moving away from a cash-based system to digital will cut costs, increase transparency, boost domestic resource mobilization and help eliminate theft and loss.
- A Digital Payments Ecosystem (DPE) will increasingly drive financial inclusion. Formal bank accounts, microfinance institutions, credit bureaus, card payment platforms, ATM agents, merchants and payment networks – the pillars of the current system – must work more closely together. Transactions need to flow from payer to payee as swiftly as possible as cheaply as possible. DPEs should also be flexible and "future-proofed".
- Electronic transfers also reduce the cost of sending remittances, one of the SDGs. The UN wants transaction costs of migrant remittances slashed below three per cent and remittance corridors costing more than 5% shut by 2030.
- Secure digital identification facilitates participation in the digital world. Lack of ID impedes poor people from exercising their democratic and human rights. Simple electronic identification systems, often using biometric characteristics, pave the way for a host of services they need, including secure bank transactions, voting, accessing social services and paying utility bills.
- WSBI will leverage its broad outreach in some 80 countries worldwide, harnessing opportunities offered by new technologies to deliver accessible, affordable and quality products and services that meet the needs of the underserved and unbanked while boosting financial access and usage.
- Savings and retail banks remain steadfast to a locally-focused, technology-driven business model that upholds the "double bottom line" approach to banking – financial sustainability balanced with returns to society.
- For the Asian region, WSBI will cooperate with Asian Economic Community nations to help them develop the financial banking system for greater connectivity.
- Under the Washington Declaration of September 2015, WSBI members aim to reach 1.7 billion new customers and set up 400 million new transaction accounts by 2020. Extending their 2012-Marrakech Declaration, WSBI members' aim is an account for everyone. Progress will be aided by high-tech breakthroughs.
- WSBI has exceeded initial targets for Universal Financial Access (UFA) 2020, both in terms of customer numbers and transaction accounts. Its 2015 report showed progress, with members reaching 1.549 billion clients and 117 million new transaction accounts, ahead of target by 2.4% and 5.9 % respectively.
- WSBI and its members also confirm their readiness to contribute to the implementation of the United Nations SDGs. This will be done through their longstanding commitment to financial inclusion, recognized as a key enabler of seven of the goals.
- Locally focused WSBI member banks are committed to promote green finance and urge G20 leaders to integrate retail and local banks within the international negotiation around aspects of financing. Because of their role in SME financing, savings and retail banks play an important role in the green financing sphere.
What can policymakers do to facilitate the switch to a digital banking future? WSBI and its members affirmed:
- Policymakers should recognize the valuable role of savings and retail banks in local communities, including as a financial catalyst for small and medium-sized companies.
- To keep pace with the digital revolution, need exists for a level playing field with proportionate rules, including new competitors in providing financial services: same rules, same risk, same regulation.
- Regulators must keep in mind the need to ensure that emerging regulation on capital – such as revisions of the calculation of risk-weighted assets, and liquidity requirements – does not undermine the savings and retail banking model that focuses on households and SMEs, nor jeopardise their role in green finance and the fight against climate change.
- Policymakers, regulators and supervisors worldwide need to keep abreast of digital banking breakthroughs. Their job is to set a regulatory framework that fosters innovation while simultaneously ensuring the security, data and consumer protection essential to preserving trust in the financial system. An enabling regulatory framework promotes transparency and accessibility for all stakeholders, which is at the core of any robust, effective and inclusive digitised banking universe.
- As competition in the payments space becomes a battle for data – a precious resource – banks should be allowed to use the data they gather to improve the customer experience and service while remaining fully compliant with data privacy and customer protection rules.
Regulation must put savings and retail banks and new entrants on the same footing, and not put incumbent savings and retail banks at a competitive disadvantage.
- Where strong consumer protection and competition laws exist, legislators should sit back for a while and let market players create, test, fail, improve, and deliver.
- To help further achieve progress on their commitment to the UFA 2020 Goals and their support of the 2030 Agenda for Sustainable Development, WSBI and its members call upon stakeholders, policy-makers and regulators to support their global financial inclusion challenge. Policy should aim to boost innovation and technological solutions, not hamper it.
- Avoiding a one-size-fits-all approach to banking rules, through a proportional and fair framework, would help unleash a more robust and diverse financial services sector.