By Audrey Lotechukwu
THUR 12 AUG, 2021-theGBJournal- The set of principles is the latest attempt at articulating a comprehensive framework for advancing financial inclusion generally or through digital means. The Principles also offers a vision that makes digitally-led financial inclusion a natural outcome of an innovative and competitive financial system.
The seven Principles are:
Inclusive by design: embedding inclusion as a principle in designing all policies, regulations, supervisory practices, products, services, security procedures, technologies, and infrastructure.
Integrated System: enabling integrated ecosystems that supply high quality, differentiated and interoperable products, and services for all.
Digitally led: promoting safe and efficient digital payments and finance ecosystems that democratize access to the formal financial system through enabling infrastructure, regulations, products, and services.
Economically sustainable: providing and maintaining quality payments and markets infrastructure, investing in innovation, keeping pace with consumer needs and demand, and ensuring the value created is appropriately shared between consumers, producers, and intermediaries.
Informed by data: using data from digital transactions safely and responsibly to design financial inclusion policies, regulations, products, and services.
Trusted: cultivating trust by educating and protecting consumers; ensuring transparency of laws, regulations, products, services and data practices; providing reliable infrastructure; and implementing rigorous privacy and cybersecurity frameworks.
Effectively regulated: adopting a non-discriminatory technology-neutral, principle-based and risk-based approach to regulation and supervision that is committed to the standard of proportionality and transparency.
According to the authors of the principle, the objective is to encourage a systems approach to financial inclusion that brings together all participants as co-creators of a financial system for all. This will require private-private and public-private collaboration to embed in the transforming financial system seven characteristic principles that are essential for an inclusive outcome:
Developed by the World Economic Forum’s EDISON Alliance. It has been led by World Economic Forum and Mastercard, with contributions from other EDISON Champions, including Barclays, Western Union, GSMA, Vista Equity Partners, and UNECA.
Michael Froman, Vice Chairman and President – Strategic Growth, Mastercard commented: “The principles will drive consensus-building conversations across the public and private sectors, to help ensure that people can reach their potential and economic growth is inclusive.”
According to him, the pandemic has accelerated digitization and made it clear that being connected to the digital economy is necessary for communities to survive and to thrive.
‘’The future of finance is digital by default, and this broad-based and adaptive set of principles provide a framework for everyone in the ecosystem to prioritize financial inclusion – embedding inclusion by design, ensuring commercial viability, and creating regulatory environments that foster trust while encouraging innovation.’’
“With 1.7 billion adults remaining unbanked, bridging the digital gap on financial inclusion is one of the priority areas of the EDISON alliances, alongside bridging digital inclusion in education and health care,’’ said Isabelle Mauro, Head of Digital Communications Industry, World Economic Forum.
The EDISON Alliance is a global movement launched in January by the World Economic Forum to boost digital inclusion. It brings together leaders from the public and private sectors from different industries to harness the potential of affordable and accessible digital solutions, ensuring that we don’t leave anyone behind in the digital economy. The EDISON Alliance is a unique opportunity for industry and governments to jointly scale existing initiatives, empower policymakers through leading practices, and pioneer innovative financial models to unlock capital at scale and ensure everyone gets online.
Twitter-@theGBJournal|Facebook-The Government and Business Journal|email: govandbusinessj@gmail.com
