Keynote speech by Mr. Haasis
Global Inclusion Awards 2017
3 May 2017
Making inclusion work for everyone: Locally focused banks' role
Dear Mrs Co-Chair of GPFI (Global Partnership for Financial Inclusion), Mrs Natascha Beinker,
Dear Mr Wessel Van Kampen, Managing Director of CYFI (Child and Youth Finance International),
Ladies and Gentlemen,
Good evening. It is a great honour for me to take part in this ceremony in my capacity as President of WSBI – the World Savings and Retail Banking Institute. I would like to thank the organizers for having invited me.
WSBI brings together savings and retail banks from 80 countries, representing approximately 6,000 banks in all continents. As a global organisation, WSBI focuses on financial issues of global importance, serving communities around the world. It supports the aims of the G20 in achieving sustainable, inclusive and balanced growth and job creation around the world – in industrialised or less developed countries.
Context: A rapidly changing world
The topics debated at this Forum such as “The Promises of Financial Inclusion – Leave No One Behind" and “Making Young Entrepreneurs Visible and Bankable'" caught my great interest. They are very relevant to current concerns on globalisation.
A globalised world means global challenges:
Countries are climbing out of the aftermath of the financial crisis
Societies are fighting against a shrinking middle class
And many people are blaming globalisation as the root cause of both the crisis and a shrinking middle class
The global economy has led millions of Europeans to question whether or not free and open markets are the best way to boost jobs, growth, household incomes and expand the middle class. A growing number of people now ask themselves: “Is this global economy working for me, my children and my neighbours? Have politicians delivered?"
The global economic force sweeping Europe and all regions around the world has forced people to change: change the way they think about work, change how they foresee their job prospects. It has made them change the way people interact with people each day and how they prepare for their financial future.
Another force is also causing great change. That force is digitisation. Digitisation is perhaps more powerful than globalisation. Its impact on our financial future and job prospects is a growing concern for people and policymakers alike.
For policymakers, the interplay of globalisation and digitisation is a big challenge. Policymakers are a much-needed voice to build the future. However, they face much competition when it comes to selling a vision of the future. Companies from Silicon Valley are offering a vision that is IT-led. They are important voices indeed, but can Google, Facebook and Amazon provide all the answers?
Some think maybe they can. They certainly have achieved success in the eyes of people in areas like smartphones. Judging from all of you with smartphones in hand, it seems that this little devise is like a Star Wars light sabre to a Jedi. “This smartphone is your life." It certainly is for me!
Why financial inclusion is important
Financial Inclusion is an important part of the 2030 Agenda and reaching the Sustainable Development Goals. It has proven to be a driving force to fight against poverty and reach inclusive economic growth. When people participate in the financial system and receive mainstream banking, they are better able to start businesses, invest in education, manage risk, and absorb financial shocks. The World Bank noted that “Access to accounts and to savings and payment mechanism increases savings, empowers women, and boosts productive investment and consumption."
Involve WSBI in GPFI
WSBI's invitation to the Global Inclusion Awards Ceremony gives us a sense of pride. Pride that we are a recognized key part of the solution that addresses financial inclusion. Indeed, the savings and retail banks of WSBI have a long history of serving all layers of the population. We serve people of all station, background, income levels. We serve the vulnerable who are earning less than a dollar a day.
WSBI's efforts in financial inclusion can be traced back to its activities for nearly two decades, such as its engagement in the 2005 International Year of Microcredit. WSBI joined the discussions led by GPFI on the G20 Principles for Financial Inclusion since 2011. We have also proposed to GPFI to launch a global-wide project to encourage savings in countries where there is still a lack of savings culture.
As the “Digital Wave" is sweeping the banking sector, the idea of savings alone sounds old fashioned as compared to FinTechs, crowd funding and BitCoin. But savings still matters. Savings transforms peoples' lives. Savings are a first step to bring unbanked people to their long-term financial future. In low-income countries, there is a pressing need to raise domestic savings and convert it into financing – loans – for local roads, housing and small business creation.
In addition to GPFI, WSBI has another partnership. That partnership is with CYFI – Child Youth Finance International. It brings WSB I members' commitment to financial inclusion and CYFI's approach in enhancing the financial capabilities of children and youth.
Thinking of WSBI's hard work around financial inclusion, I would strongly ask for GPFI to think of WSBI as one of GPFI's partner industry bodies.
How locally focused banks support global youth inclusion
WSBI is proud of being a coalition partner of the World Bank's Universal Financial Access 2020 goal. We have made great progress. Since making our pledge in September 2015, we have expanded the number of clients by about 200 million to 1.57 billion. We plan to see by 2020 that number increase to 1.7 billion clients served.
Focus on the youth
There is a lot of concern especially around young people, not only in getting them access to banking services but also taking part in their local economies. A UN report shows around 300 million young people lack a job or even a full-time job. In Europe, it was the young people who paid the biggest price of the economic crisis that swept the continent with unprecedented jobless rates.
Not having a job early in a career affects job prospects and wage for the rest of a person's lifetime. For the first time in 70 years, there is a great risk in advanced economies that the young generation grows up poorer than their parents.
Global forces and the digitalization are changing the way we work and how employers employ. More and more flex-jobs are now offered. Freelance is now the fastest growing segment in many labour markets.
One answer to get more young people on a career path is to promote more start-ups created by them. But what we find is that young people sometimes need a gentle push. That little push is missing in the current economic climate – not only here in Europe but also in other places.
In response to this hi-speed and hi-tech revolution, there is need to call for action: show them the tools and know-how to start a business and make it grow.
Locally focused banks' approach to youth financial inclusion
Look at countries like Germany. According to recent researchon “financial inclusion, regulation and financial education in Germany", Germany's bank-based financial system provides a high level of financial inclusion. This can be attributed to close relationship management by locally focused banks, financial consumer protection and credit reporting regulations and institutions.
The German Savings Banks have spent more than 40 years of experience and external partnership with schools. They work to bring students closer to the functioning of the economy and money. They develop materials addressed to the needs of young people, so that they can transfer this knowledge to real life challenges.
Indeed, locally focused banks like those in Germany have taken note that in developing countries, youth and young adults represent the largest part of the population. Yet, they are among the least banked. Hence, locally focused banks have refocused on youth inclusion in different ways:
First, we connect with youth at a young age by creating accounts that grow with them. A joined study by WSBI and Child Youth Finance International (CYFI) shows that through SchoolBanking – teaching students about banking and the importance of savings – we see better understanding and more active use of financial services among children and young people. SchoolBanking helps to achieve “Full Economic Citizenship" for the next generation.
Second, we use “learning by doing" financial management programmes for young people. We improve young people's know-how in business and finance through the European Stock Market Learning initiative. This initiative is an online stock market “game" that brings youth from 15 years old in Europe to compete. Since the project started, about 7.5 million youth have joined up through more than 45,000 teams per year.
Third, our members offer young people with tailored and affordable financial products and services by using digitisation to reduce the financing cost for young entrepreneurs. This has been evidenced by our WSBI member in Ghana, who has won the CYFI Pioneer Award for having developed an interest-bearing youth savings account.
Fourth, we encourage young entrepreneurship by providing them with a positive business environment: providing social resource by cooperating with schools, industry and research bodies and, NGOs.
Last but not least, we always highlight that young people need to be given the opportunity to act through access to adequate banking services and institutions. With this approach young people can build the skills necessary to learn how to use financial services in a productive and responsible manner. They learn how to protect themselves from abusive financial practices and over-indebtedness.
To create a welcoming place for young people to build a future, we need to take a multi-stakeholder approach. Those who have a stake in this challenge have to be involved. That means banks, Ministries of Education, Ministries of Social affairs, and NGOs such as CYFI. On behalf of more than 6,000 savings and retail banks who I speak for, we are ready and willing to support youth inclusion.
Before I close my speech, I would like to give praise to the winners of Global Innovation Awards. You are truly world class!
To GPFI and BMZ, who chairs the GPFI G20 Presidency, I would like to congratulate you on the great work that you have done. I hope that your efforts and ours will help move this mountain.
Congrats also to GPFI and CYFI for choosing such a stunning setting for this awards event.
To conclude, let me say that today's awards and award winners will inspire us to continue our work to help young people when making their way in this complex world.