Savings and retail banking body expert provides examples of new business models at Felaban
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BRUSSELS, 15 November 2016 – Financial inclusion efforts can boost bank balance sheets and long-term client relations, an expert from WSBI told Latin America's said last week during Latin America's largest banking industry event.
Speaking at the 50th Felaban Annual Assembly held 5-8 November in Buenos Aires, WSBI Senior Adviser Aimée Suarez-Hernansanz addressed more than 1500 participants on financial inclusion efforts by WSBI and its members, saying that greater financial inclusion means more people look to banks to place their savings, the core source of funding for locally focuses banks when they convert deposits into loans for households and SMEs. She also noted that people also seek to make secure payments, farmers seek to secure their crops with micro-insurance, all in all aiming at lifting their socio-economic well-being.
WSBI's Suarez showcased WSBI members' diverse business models used to tackle the root of financial inclusion in their local markets and while staying relevant in today's fast-changing banking landscape. Suarez said: "There is great need to have a deep understanding of segments served. Harnessing technology and innovative ways to make it happen, coupled with a clear risk management. Leadership plays a key role in the process too."
Suarez drew on examples in place by WSBI members around the world. Spanish member CaixaBank is a leader in the online banking market there though efforts like the all-digital "ImaginBank". In Asia, Bank Simpanan Nasional (BSN) in Malaysia has launched VTM – Virtual Teller machines – solutions. Tanzania Post Bank has found success in group lending initiatives in Tanzania. In Latin America, Banco Caja Social has a winning customer-centric approach in Colombia while BancoEstado in Chile has empowered all layers of society in Chile via the simplified account "CuentaRut" and the Agent Banking scheme "CajaVecina".
Joining Suarez on the Tuesday panel on financial inclusion and new business models was moderator Beltrán Macchi Salin, President, Comité Latinoamericano de Educación e Inclusión Financiera de FELABAN – CLEIF; Sergio Galván, Manager of Corporate Communications and Economic Studies, Banco Santander Río; and Nuno Lopes Alves, Managing Director, Head of Digital Transformation - Financial Services Latin America, Accenture.
WSBI's presence at the 2016 Felban is important because financial inclusion is a top policy objective for WSBI and its members, as illustrated by the Marrakech Declaration: "An Account for Everyone", adopted by its membership at the 2012 WSBI Congress in Marrakech and the subsequent WSBI 2015 Washington Declaration. The Washington Declaration commits WSBI to the World Bank Group's Universal Financial Access (UFA) 2020 Goal. At its general assembly in 2015 in the U.S. capital, WSBI announced an aim to reach 1.7 billion customers and 400 million new transaction accounts by the end of 2020, based on the current membership. In addition, WSBI has also successfully intervened with the Financial Action Task Force (FATF) in 2010 to convince them to adapt their original anti-money laundering/combating the financing of terrorism (AML/CFT) rules to a more adapted risk based approach (RBA) based on the national context and to risks posed by transactions. To help reach more low-income people and promote the goal of financial inclusion, WSBI is represented on the FATF RBA project group.
WSBI announced in April that it has exceeded its projections on its commitment to the Universal Financial Access 2020 Goal both in terms of total numbers of customers as well as transaction accounts. In a strongly upbeat 2015 progress report submitted to the World Bank Group, WSBI reported that clients reached by its members was 1.549 billion, 2.4% jump from projection. New client numbers swelled, with 117 million in 2015, up 8.2% from the 2014 level. Transaction account reached 2.331 billion as at 31 December 2015, or 5.9 % above the year-on-year projection. New transaction accounts levels grew by 244 million in 2015, an 11.7% jump from 2014. The results prove that WSBI and its members are pushing ahead with their September 2015 pledge to reach 1.7 billion customers and 400 million new transaction accounts by the end of 2020.
WSBI sees digitisation as an opportunity to reinforce its profound commitment to customer proximity to give better access to basic financial services. Digitisation is an essential support in reaching out to the two billion people worldwide, who currently have little or no access to financial services. It recognises that achieving the World Bank Group's Universal Financial Access (UFA) 2020 Goal requires a collective effort and we are pleased to be part of the initial Coalition of Partners.
Representing financial institutions and federations, the WSBI Latin American and Caribbean Group (GRULAC) looks to create and share knowledge with one another and to raise awareness of WSBI and its positions with people in the region.
The GRULAC was established to bring together the members in the region to keep close exchange on specific issues and to promote the exchange of best practices and create opportunities for business cooperation.
Representing 12 financial institutions from 11 countries, the group's members meet at least once a year at annual regional group meetings. Those meetings serve as a platform for exchange of experiences among members and also provides potential members or other interested international or regional organizations a way to keep up to date on savings and retail banking as well as WSBI efforts in the region.
Cooperation between WSBI members in the group ranges from contact building and exchanges of information to the development of concrete business opportunities, at bilateral or multilateral level. For example, members host training workshops and one-on-one study visits for fellow members, sign business cooperation memoranda of understanding, exchange expertise and enter into reciprocal business partnerships.
The Universal Financial Access 2020 goal
The UFA 2020 goal is for adults globally to have access to an account or electronic instrument to store money, send and receive payments as the basic building block to manage their financial lives by the year 2020. The UFA goal is defined as defined as universal ownership of a store-of-value transaction account. Access to a transaction account is a stepping stone to financial inclusion, which includes a range of formal financial services like savings and transaction accounts, but also insurance and credit.
Achieving universal financial access by 2020 is a collective effort. The World Bank Group aims to contribute to delivering accounts to reach as many as 1 billion currently unbanked people with access to a transaction account. This effort is primarily led by the World Bank and International Finance Corporation (IFC), with further support from MIGA as well.
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