Youth in rice farming, Philippines. Photo by Jayson Berto, 2016 CGAP Photo Contest Photo by Jayson Berto, 2016 CGAP Photo Contest

Policy

New technologies are rapidly changing the face of finance, breaking up financial services into smaller components digitally delivered by new players. Large retail chains, electronic money issuers and big technology and social media platforms such as WeChat, Apple Pay and Google are entering the financial arena, leveraging the vast amounts of data they harvest from consumers’ online purchases, text conversations or Facebook posts and combining them to deliver new financial services.

While these innovations offer great potential for expanding financial services to larger numbers of people especially the financially excluded, they raise new questions for policy making in an environment that was largely built for banks. Should the newcomers be regulated and supervised and by whom? What rules on market competition apply? How should data privacy be managed? Where is the balance between fostering innovation and protecting consumers? What risks are posed to market stability?

As financial services increasingly become modular, automated, disaggregated and transnational, CGAP believes that policy makers need a new approach. Successful financial inclusion requires a policy and regulatory framework that fosters responsible, inclusive financial systems and one that has the flexibility to adapt to rapid changes. Consumers must view the system as fair and stable, protecting their interests. Businesses must know there is a clear set of rules balancing innovation and stability while fostering appropriate competition and cooperation.

Latest Research

Slide Deck

Platform Business Models

Internet platforms are taking the world by storm, making it easy for third parties to exchange goods and services. Adding financial services can improve the experience, but what risks should financial service providers and regulators consider?
Publication

The Use of Agents by Digital Financial Services Providers

Agents play a crucial role in lowering the cost of delivery to reach the unbanked and underbanked population. An increasing number of countries, especially emerging markets and developing economies, allow a diverse array of banks and nonbank institutions to distribute digital financial services...

Infographic

How to Make Data Work for the Poor

It's time for new approaches to data protection and privacy. This infographic showcases CGAP's solution in a visual format.

Latest Blogs

Blog

Ghana Launches World’s First Digital Finance Policy Amid COVID-19

While the new policy has been years in the making, the government hopes the policy will support its measures to leverage digital financial services in its COVID-19 response.
Blog

Open Banking: 7 Ways Data-Sharing Can Advance Financial Inclusion

When banks and other financial institutions responsibly exchange customer data with other providers, the result is better products for low-income customers.
Blog

Kenya’s Expansion of G2P Becomes Lifeline During COVID-19 Crisis

Kenya offers higher fees to providers that facilitate digital government-to-person payments in underserved areas. Today, this makes it easier to reach hundreds of thousands of low-income people with assistance during the COVID-19 crisis.