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HARNESSING THE POTENTIAL OF FINTECH IN DEEPENING FINANCIAL INCLUSION: PRACTICAL REGULATORS EXPOSITIONS
OBJECTIVE The overall objective of Knowledge Exchange Program-2 was to develop shared insights and knowledge on practical policy solutions to issues related to creating Enabling FinTech Ecosystems and the different approaches applied by developing and developed country financial regulators for Financial Inclusion. Specifically, Knowledge Exchange Program–2 was organized to help member institutions to: > Develop a better understanding of the regulatory landscape from various jurisdictional contexts and peer exchanges for practical adoption of best practices on Open Banking and Open API. > Develop a better understanding of the regulatory framework to enhance implementation of practical policy solutions for Digital Identity Systems and e-KYC. member institutions with knowledge, best > Equip practices and standards in data privacy and protection laws, regulations, compliance frameworks, and needed collaboration with other relevant authorities (i.e. Competition and Data Protection authorities) in the changing landscape of Digital Financial Services. > Enhance the knowledge of member institutions for devising practical solutions to mitigate the impact of emergencies such as COVID-19 and potential solutions that can be considered in the pandemic’s recovery phase by policymakers. Output: Knowledge Exchange Program-2 is a platform for participating AFI member institutions and their financial regulator peers from developed countries to share knowledge and experiences to enhance capacity on innovative and enabling policy environments for Digital Financial Inclusion and, more particularly, for Enabling FinTech Ecosystems. The event’s key insights are synthesized in this report, presenting the key practical policy solutions discussed by the AFI member institutions and developed country financial regulatory institutions. Outcome: The knowledge gained from participating in Knowledge Exchange Program-2 will be used to enhance existing policy solutions and the development of new policies in specific areas by participating member institutions.
REPORT SUMMARY OPEN BANKING AND OPEN API DAY 1: OPEN BANKING AND OPEN API SESSION 1: STATE OF OPEN BANKING AND OPEN API > This session gave an overview of Open Banking and Open API initiatives in Thailand, Philippines and Mexico. service providers are disrupting the > Third-party financial sector with digital financial services, posing hard questions to regulatory and supervisory authorities on their traditional roles. > Carefully designed Open Banking solutions can help overcome the challenges of limited access and usage of formal financial services provided by banks and non-bank financial institutions (NBFIs). Application Programming Interfaces (APIs) > Open enable third-party service providers to access customer transaction data of banks and NBFIs, which helps banks and NBFIs to better understand customers’ financial behaviors and design appropriate products for them. > The API standard is thus a key enabler for the efficient, secure and cost-effective flow of data without which DFS cannot function. > Underlying Open Banking is the concept that customers own their financial and transaction data. Thus, this data should be shared only if the customers agree. > Open Banking also supports innovation by promoting competition in the market.
SESSION 2: IMPLEMENTATION CHALLENGES OF OPEN BANKING AND OPEN API > This session focused on how to leverage Open Banking initiatives to achieve financial inclusion. It showcased the experience of the UK, one of the first countries to have an Open Banking regime, for others to learn from its successes and challenges. > The UK adopted Open Banking after nine of its largest banks agreed to give authorized third-party providers (TPPs) access to personal financial data of customers who had consented to it.
