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

Publication

The Future of G2P Payments: Expanding Customer Choice

There’s a better way to deliver government-to-person (G2P) payments. Modernizing the delivery architecture can increase value for customers, lower government costs and create competition among financial service providers.
Publication

Beyond KYC Utilities: Collaborative Customer Due Diligence

CGAP has developed a typology to help policy makers and financial service providers evaluate the financial inclusion potential of a new range of collaborative approaches to customer due diligence to combat money laundering and terror financing.
Publication

A Guide to Supervising E-Money Issuers

This Guide provides general guidance to emerging markets and developing economies supervisors who are designing proportional approaches to EMI supervision and serves as a reference for drafting or improving EMI supervision manuals in a few specific areas.

Latest Blogs

Blog

Cloud Computing for Financial Inclusion: Lessons from the Philippines

For the first time, the Philippine central bank has allowed a bank to move its core banking operations to the cloud. Its approach, balancing caution with forward thinking, holds lessons for regulators in other countries.
Blog

Regulator’s Friend or Foe? Cloud Computing in Financial Inclusion

Financial regulators in emerging markets shouldn’t fear cloud computing. When regulated and supervised properly, it can be a boon to financial institutions trying to reach underserved customers. Here are some tips for regulators and supervisors.
Blog

Running a Sandbox May Cost Over $1M, Survey Shows

CGAP and the World Bank surveyed regulators across 30 countries to find out how and why they’re using regulatory sandboxes and what it takes to run one.