Suitable regulations key to financial inclusion: analysts

Technology, innovation and suitable regulations are the key to deepening financial inclusion, analysts said at a seminar yesterday.

“We need a grand alliance to create a new inclusive model where the government, mobile operators, payment service providers, banks and users will get a common platform with only one objective in mind,” said Muhammad A (Rumee) Ali, chairman of ICC Bangladesh Banking Commission and CEO of Bangladesh International Arbitration Centre.

At a discussion on 'supporting sustainable development goals through digital financial models by inclusive business' at Sonargaon Hotel, he said bKash, a mobile financial service provider, did a great job in Bangladesh so far but it is only a payment system, which helps to transfer money.

“To harness the right potential we need to create a great inclusive model,” he said on the last day of the two-day conference on 'regional integration to achieve sustainable development'.

He stressed the need for proper identification of the customers for suitable wallets and a balanced regulation regime.

The country needs fast and cheap payments, which will also help create a digital currency; here, the last mile access is very important, said Ali.

Salehuddin Ahmed, a former governor of Bangladesh Bank, said the regulator should not be extra cautious or careless about any new technology.

“We can't stop technology but we need to be careful about it. We need to try to find out the people behind the technology, their purpose and how they are using it.

“The regulator shouldn't put everything on the bank's shoulder.”

The International Chamber of Commerce-Bangladesh co-organised the event with the United Nations Economic and Social Commission for Asia and the Pacific and the commerce ministry of Bangladesh.

Barbara Meynert, chair of ESBN Task Force on Digital Economy, said technological challenges do not create any barriers. Rather, it is regulation that is the main obstacle to financial digitisation, she added.

Ten years ago, China was a cash-driven economy but now 75 percent of their transactions happen through technology, because of a change in regulation. The same thing happened in India as well, she added.

Kamal Quadir, chief executive of bKash, said people earlier used to keep their money under their mattresses, but they now go for a digital format.

Money is sent from one mobile to another, which reduces the cost of human intervention. It will lead to achieving the SDGs before the targeted time of 2030, said Quadir.

“This innovation gives advantages with some kinds of challenges. And just because there are challenges, it doesn't mean that we shouldn't pursue the solutions.”

Mahtabuddin Ahmed, managing director of Robi, said mobile operators have the investment and technological capability as well as the platform to give financial services.

Arastoo Khan, chairman of Islami Bank Bangladesh Ltd, said digital financial services will be the real game changer and they are going to concentrate on the issue, though there are some challenges.

Sohail RK Hussain, managing director and CEO of City Bank Ltd, said digital banking will help establish a cashless society and that will play an important role in achieving further economic growth.

George Kam Ho Yuen, board director of Industrial and Commercial Bank of China (Asia); Naoyuki Yoshino, dean of Asian Development Bank Institute; Phang Yew Kiat, vice chair and CEO of Credit China FinTech Holding Ltd, and Vineet Sachdev, director of BOSS BPO, also spoke.