call vote which is just passed by unanimous consent. >> i think the merger at the top of everyone's mind, both at fcc and in congress and for people who watch this space, acquisition of tribune media company. politically aligned with republicans, with the administration, the implications of them growing bigger. >> watch the communicators tonight at 8:eastern on c-span 2. >> digital technologies are changing access through the united states and abroad. up next, a brookings research analyst shares his data on the

impact change. that will be focused on the rise of technologies, this is about 90 minutes. >> i would like to welcome you to our forum on financial inclusion, we are web casting this event live, so we'd like to welcome our viewers and also those of you who have tuned in via c-span for those of you who are wishing to post comments during the forum, we have set up a feed at #financialinclusion, you are willing to make any comments you would like. >> there are nearly 2 billion adults globally, who do not have bank accounts. this makes it difficult to access financial services, pay bills or transfer money to

relatives. in those situations, it's difficult to be an entrepreneur. the good news is that many nations have made commitments to expanding financial services to the poor, they understand that financial inclusion is vital to economic development. they are developing financial inclusion policies and implem t implementing a new framework that encourages inclusion, today, robin lewis and myself are launching our third annual brookings scorecard with the support of the bill and melinda gates foundation. the short summary is that we've seen progress on financial services in many places.

this is happening through mobil money and digital financial services. as part of our research, we got detailed suggestions from every community. to give you a more detailed sense of the highlights of our study, my colleague robin lewis will summarize the key findings, robin is a research analyst and associate fellow with brookings. with that, i will turn it over to robin. >> good morning. thank to darryl for those remarks, and our insire thanks to all of you for joining us

this morning. either here at brookings or via live stream i'm looking forward to providing a brief overview of approach and key findings, before we turn it over to the panel discussion. first i'd like to start with a brief overview of our project. the financial and digital inclusion project was launched in 2014. the purpose of the project is to provide policy makers, private sector representatives, nongovernmental organizations and the general public with information that can help improve financial inclusion in the focused countries and around the world. why does financial inclusion matter? financial inclusion matters because it provides pathways for people to improve their financial health which contributes to their overall

well being. beyond that, poverty reduction and gender equality. to support our overall objective, over the past three years, we have selected a series of politically and diverse companies. let's talk briefly about the report we are launching today. this is the third annual report, and as with the first two reports, we examined access to and usage of financial sources, across diverse country contacts. we primarily focused on basic services, since these are often the entry point to the formal financial system. including savings accounts and

government to person transfers. we have disuntilled and updated the country profiles we featured in 2015 and 2016. in addition to these highlights, and recent updates, we have inclu included some key next steps for financial inclusion. given the scope of our sample, these lists are not exhaustive, but we do believe they capture an important snapshot for future growth. >> as darryl mentioned, one of the components of our report is a scorecard tool. we identified four dimensions of financial inclusion, including country commitment, mobil capacity. regulatory environment and the

adoption of formal financial services. we maintain the same list as in the previous year, in which we added five new countries to diversify our sample. these countries include egypt, el salvador, haiti and vietnam. we'll dive into the dim erngs level findings shortly, here's our preview of the 2017 scorecard. the top scoring can'ts are generally distributed across latin america and sub is a haren africa. countries in other regions demonstrated strong performances as well. for the third year in a row, kenya received the top place on our scorecard. widespread adoption of mobil money services. with that said, a number of other top scoring countries have

experienced lower level of adoption to date, but often have robust take june of card services as well as nontraditional access points. we think that this finding should be very encouraging to the financial inclusion community because it demonstrates that countries with economic and geographic environments can pursue different pathways for financial inclusion. we'll briefly walk-through some of the indicators across the four dimensions before we explore our findings. country commitment indicators include the existence of comprehensive strategies. these indicators help give us a sense of whether countries are

willing to work collaboratively across sectors. moving to mobil capacity we measured this because it includes indicators of mobil infrastructure. while digital inclusion services extend far beyond mobil money. it can provide a platform for those who are typically underserved to access financial services. >> moving to regulatory environment. we look at whether regulations concerning electronic money and other forms of digital financial services have been issued. we have also looked at intramoney platform. can customers of one service send payments to members of another mobil money service.

finally, moving to the adoption indicators, we focused on account adoption with both more traditional providers, as well as money providers, across underserved groups in particular. all the date de in this set is from the world banks global database, we look forward to upskating the data as the new data set is released. >> first, let's begin with the country commitment dimension and touch on a few examples of country's progress. mexico increased its overall score to join the top five scoring countries. in june of 2017, the national council released the national fine inclusion plan the governor

of mexico also enjoyed the cash alliance. el salvador is an example of a country that boosted its score by five percentage points over the last year. partly due to the increase of smart phones. moving to regulatory environment, countries from across all of our major regions had strong performances on this component of the scorecard. including peru, the philippines, india and rwanda. india has licensed several entities as payment banks which has hoped to increase access points for undersivged individuals.

>> let's move to our adoption findings. the data and metrics are consistent from last year among the new countries that were added in 2016, one example is the dominican republic which received the highest score. let's turn to some of the key findings and calls to action in this year's report. there has been considerable growth and recognition that federal inclusion is not only important for individuals but it can contribute to growth and sustainable goals. one interesting data point on this front is that as of this year all of the countries in our sample are members of groups or networks.

we need concrete steps to emerge from their engagement. this is where infrastructure investments and the regulatory components of the scorecard come into play. in addition, we also need consistent detailed data to track progress toward these goals. a portal that allows countries do do that is the data alliance platform. we hope more countries will take the opportunity to include timely detailed data available for public consumption. >> moving to our next key finding, the intersection of finance and technology provides tremendous opportunities to accelerate progress toward financial inclusion. basically, it involves the

innovative use of technology to design financial services and products. if that sounds like a really broad catch all term, that's because it is. this can help enhance the accessibility for consumers and render the deployment of these services more cost effective for these providers. in a 2017 report for the institute of national finance. and the center for financial inclusion a spanish bank is working to extend credit access to individuals who may not have a typical credit history they have established. they not only enable customers to access financial services, they can help it become more accessible for individuals to use these services.

in indonesia, as of august 2016, the financial services authority provided an outline of guidelines for the local industry. additionally, in south africa, they're increasingly prevalent and a regulatory framework is expected to form part of the conduct of financial institutions bill in 2017. finally, we encourage countries to amplify investments in cyber security efforts, in order to fully repeat the benefits of financial services innovation, with the proliferation of digital technologies, boundaries are blurring across traditional financial service providers as well as tech start-ups and other groups. while many of these companies are very nimble and cost effective they may not have the resources, the infrastructure or the experience to ensure the

services they help provide are safe and secure. with that said, banks are not exempt from this. in a conversation with many stakeholders we had in february of this year, one suggestion that emerge s was from policy makers as well as service providers to enhance cyber security, and provide technical assistance. for implementing those solutions. >> we look forward to hearing from all of you regarding this year's report and scorecard as well as the 2015 and 2016 reports. we will continue our efforts to facilitate dialogue we have an address set up here at

brookings.edu, where we welcome your feedback. and now, thank you for listening to the presentation, i would like to invite our moderator to the stage to share their perspectives on financial inclusi inclusion.

thank you very much for setting the stage here, and thanks to all of you for taking time out of what i'm sure is a busy schedule to help with this dialogue. i'll introduce our two panelists and i will ask a series of questions, and we'll hear their perspectives until approximately 11:00, and we'll open it up to questions you may have and aim those things up no longer than 11:30, with that as a agenda setting, immediately to my left is camille, director of the brookings race, prosperity and inclusion initiative, and a senior fellow in government studies.

camille has deads indicated her career, she came to brookings from cgap. previously she worked for the consumer financial protection bureau, where she served as the agency's inaugural head of the office of financial education, to her left, we have diego milano. diego is an international consultant in the area of digital transformation in companies and government. he was minister of information and communication technologies through the ict of columbia, during his tenure, not only infrastructure, but services, applications and users. fiberoptics, even those in the

middle of the amazon. education, health, banking and government services were transformed. >> i'm very privileged to have these two panelists with us, i'm going to start off with an initial question that i'll direct to camille and then i'll have a question for you, diego. camille, as mentioned a moment ago, you are the director of the race, prosperity and inclusion initiative. can you explain why financial inclusion matters, including low income individuals and communities of color? >> sure, thanks for the question. i'm really happy to be here discussing financial inclusion, not only globally, but domestically, a lot of people are aware of the fact that we have 10 million people who are unbanked and another 25 million who are underbanked. meaning they don't have access

to the full suite of financial services and products. what that means here is a couple 24i7ks, just generally, not having access to financial services makes it difficult to save money. and to be prepared for emergencies. but also makes it difficult to start investing and creating a foundation for wealth creation. when we don't have that, particularly in the united states where leverage is really important to building wealth and particularly important to transferring intergenerational wealth, not having the services and not being included in the financial system makes it difficult to make strides. you see that here in the u.s., because a lot of the people who are not formally banked, tend to be communities of color. we have a large racial income gap as well as wealth gap, and

some of that is attributed to the fact that we do not include a lot of african-americans, latinos and others in the formal financial system. in the u.s., for the median wealth accumulated by white households is 111,000, and for african-american households it's $7,000. that gives you an idea of just the disparity and why it's so important to have folks included in the financial system? >> thank you very much. >> diego, given your expertise and experience in ict, can you share some examples of ways you have seen or expect to see digital technology transforming the digital services sector. >> thank you so much for the invite today. as camille was saying, we have

many, many, many challenges in terms of financial inclusion everywhere in the world. one of the main ones is infrastructure. how do you get to banks with everybody. through technology, that's the solution. that's what's happening. i'm sure most of you guys know the example in africa, you know, many technical operators are moving in that direction. but having access to technology is not enough. we are proving that in most countries, just around 50% of people are internet users. no more than 85% of people are already covered by networks. why? because there is no applications for them. why you use internet, they

answered, it is useless for me. it doesn't change my life. basically we have to work not only in the infrastructure, in developing more solutions. and that's part of what the financial sector is doing. the financial sector is starting to use this technology for mobil payments, and then some financial services, not only that, the future of that is huge. in digital identification. the impact of reducing poverty is huge. how you make sure that people have an id. if you see today, the financial sector is the one that has the pull to create i.d. platforms for everybody.

secondly, you know, most of the credit given in the whole world is based on -- so now the financial sector has the power to move that to digital. and help people to get credit easier, instead of going to the traditional paper state owned registries, the service can also move to detail and transform completely the way credit is given today. >> thank you very much for both of your interesting perspectives there. the next question is -- relates to the united states. and this is as robin mentioned. this is the third year in which we've been doing this. our project has been looking at the set of countries robin alluded to a few moments ago.

there's a very significant -- whatever comes your way. some number of tens of millions of people excluded from or at the margins of the financial system, so it's a reasonable question to ask what can we learn, i guess my question is, what can we learn now that we have this incredibly rich tap industry of solutions that are being explored around the world, this global effort to improve the ecosystem. how can we bring those lessons learned and apply them to inclusion here in the united states. >> i'd really be interested in hearing your answer to that question. there are three areas where becan learn from the rest of the world. i think what's interesting about the u.s., it tendses to be very

sek toral. you have communications regulation, you have different types of financial regulators at the federal level as well as at the state level, you have a lot of sek toral regulation, it's quite siloed. i think what's interesting, you see a melding of that. a little bit more of a flexible approach. particularly, as technology -- here i think we could learn, that's one of the lessons i think we can learn. the second is, as diego mentioned, interesting area of overlap between generating

digital identification and account opening, which india has done really well. particularly for simple basic accounts, that is something we could learn from other places. finally, i think what a lot of the experiences have shown is that there is a market for people who are doing very small frequent transactions. i think we need here in the u.s., we need to revisit how it is we encourage innovation around that, and how it is we regulate around that. small but frequent transactions. >> i'm not an expert in the

united states, but that doesn't prevent me from answering. but, you know, this is -- this is very easy, let's -- you guys in the u.s. have to go see what is happening, go copy and paste. copy and paste. let it grow in the united states, like it is growing in many, many, many countries. go copy the order from mexico, let's see how the framework can be implemented as well as the u.s. to tackle people -- the financial sector in the u.s. and everywhere in the world is focused on people 37 they're happy with high margins. just very few in the world are

concerned about people in the base of the pyramid. very few in the world are developing new business with lower margins. so if they don't go, let new people go to the market. adjust your regulatory framework as we are doing in the developing world. >> thank you for your comments. this is a question primarily for diego, as it relates very specifically to colombia as everyone in the room knows. there's been recent accord in colombia, ending a decade's long conflict involving farc, there's a lot of optimism in terms of the future of colombia, now that that has been concluded. i guess my question is, what do you think of the impacts of that will be in the landscape, given this very recent development. >> look, i think it is going to

be a different country. we're going to move to a different level. completely after 60 years of work, where we spend most of the budget in defense. most of the colombian budget wasn't defended until this year. the location is the largest budget, we don't have to spend in defense. we have a piece of agreement. >> many areas, most of the country was in the middle of the conflict, developing business in those areas was very, very, very hard. so now we have an opportunity to develop business in those areas. thirdly, the gorman has had a policy on how to encourage the growth of financial services, as it were many we join forces

between the ministry and the finances and the finance ministry. deploy infrastructure everywhere in the country. colombia is the best collected country in the region. we have everywhere, even in the middle of the jungle. that has to be you know part of the day by day life of people in those areas in those areas that were involved. all these subsidies, they're giving today to poor people, that includes the subsidies for

the victims of the conflict. also, in order to encourage the growth of that demand, we -- the gorman also change the regulation so new companies are now part of this part of this game. the whole country is going to change dramatically in the coming years. >> thank you very much. >> here's a question for both. what do you think the greatest challenges are that the financial community faces in seeking sustainable development goals, such as poverty reduction and gender parody that's a huge question we can have a ph.d. thesis on either one of those. to the extent we can talk about it in a few minutes.

your thoughts in terms of the greatest challenge. there's been all this effort in the last 5 or 10 years, we're a long way from having enough poverty reduction, and certainly nowhere near gender parody. >> i'll take a crack at it, i'm sure there's about 15 things that we could probably think of. let me just mention three, i think gender parody is continuing to be a very intransigent problem. and there are many reasons for that, but when we look at financial inclusion in general, women tend not to do very well. there are going to be some exceptions to that, kenya being one of them, obviously. the second thing is, i think that one of the challenges of financial inclusion is to figure out both at the country level, but certainly the community of

philanthropists as well, how is it that we link financial inclusion to economic participation and to social inclusion. and what are all the steps from getting included in the formal financial system, to getting into the formal employment system to then moving and getting some kind of social movement and social mobility. i think those kinds of steps aren't well mapped out, and you can install several different nodes, that's a real problem. the last 24i7k is, for the ultrapoor, i still don't think financial inclusion is as relevant as getting people stabilized to the point where they can take advantage of financial services. i think we still haven't really cracked how to do that kind of economic stabilization, and a mass level. i know there are a lot of experiments, we worked a lot on

graduation, which is a kind of an approach to economic stabilization. that needs to be much larger scale to really crack that nut, i think. >> i think is creating trust, especially with financial services. how you make these people that haven't had access to any financial service to trust. we all do it here. how you break that barrier and create trust of saving money or committed to pay interest on a loan or whatever, you know. that's the main challenge for me to expand financial services to reduce poverty. so how we create trust between consumers and the financial providers and these new financial providers. and secondly, how we create trust between those new players and the regulators.

and that's a tricky balance, you know. we have to adjust the regulation, but we have to have the right balance. in countries like columbia, again, you know, having a huge narc oh traffic problem, laundering money is a key issue. so regulators are not really keen to open the door because they may have more laundry mechanisms. so we have to create trust as well between the new players or the new services and government. and traditional banks, you know, what we have found in many countries is that traditional regulation, it is too heavy for banks to go to basically the pyramid. so also, you know, not only having a new regulation for new players but a softer regulation for the current ones. that's key. >> and i'll take the liberty of

briefly stepping outside of my moderator role anda help but mention with we talk about trust that that's another reason why cybersecurity is such a really foundation alpart of the equation and one which at least in my view has not gotten nearly the attention that it needs in this context. there are a lot of people who talk about it, but i think at ground level there are -- there isn't nearly enough cybersecurity. of course, if you're new to the financial system and one of your first experiences with it is losing are your money because the new solution you tried got hacked, then obviously that is exactly the opposite of what we want to have happen to build trust in these new services, new in the sense of from the perspective of the people who are adopting them. so trust is a really, really important issue. okay. so let me ask a question this is really for camille. specifically your experience at the consumer financial

protection bureau. given that, do you have any thoughts about how to advance consumer protection and privacy this this increasingly dij i teased environment through the lens of or in the context of financial inclusion? in other words, as we deliver these services but do in a manner that, you know, provides the requisite levels of protection and global even though, obviously your personal worth happens to be in the united states on this. >> sure. and before i answer that, let me just say the consumer financial protection bureau is the newest financial services regulator in the u.s. it was created in 2011 as a result of the financial crisis. and it really governs market conduct in the financial service arena. so when i think about consumer privacy and consumer protection more generally for people who at the base of the pyramid, i do, of course, think about trust,

but i also think that the kinds of people who are just getting into the financial system for the first time are people who aren't used to, you know, the marketing tricks, let's put it that way, or the ways in which their data may be used, et cetera. so they're just not really aware of the many ways in which a financial institution can make use of their data and can also put them in a fairly precarious financial position if something goes wrong like a loan isn't repaid, et cetera. so from a just purely at the privacy level, i think it's really important to explain to people what it is they're getting into. and there are many creative ways of doing that using visuals, et cetera, so i think that's really important and it's important for regulators to be at the forefront of encouraging

providers to provide that kind of education. i think the second thing is that privacy standards can really vary country to country. they can vary depending on the sector of the financial services provider. so it might be different if you're in telecom and it might be different if you're in banking and then different again if you're in fin tech. so there has to be some way of har mondayizing that and bringing those up to global standards. and i think there it's really important for regulators to conduct meetings where they are not only talking to providers, but they're talking to, you know, consumer advocacy groups. they're also talking to other regulators about how you do that kind of coordination. and particularly in areas like sub sa harian africa and south asia, i think it's very, very important to have a regional approach to that, because there's a lot of people movement for jobs, for economic opportunity, and so i think it's

extremely important to have a harmonize the approach not only within the country and within various sectors in a particular jurisdiction but across regions as well. >> thank you very much. i have a question for deego here. so as a reminder of the audience we measured financial inclusion with respect to four key divisions. columbia received a.score on the country commitment axis of those four axe i says in relation to financial inclusion. i would be interested top what are one or two of the things that clum bea did to demonstrate this commitment to advancing financial inclusion. >> the first one monetary policy, so we issued all the policies to include everybody. secondly, deploying the tools, floig technology so people can have access to it. columbia is also number one in

technology affordable in the world. so this is about deployment but also making it affordable for peechl. thirdly, the public private partnerships. that's very, very important. so we went to the financial sector and the traditional one and said, look, we have to go to the base of the pyramid. what do you need? you know, some regular la toirt adjustments both in terms of finance and telecom that we did. and, for example, just out of that just one bank, they deploy this program now it is one of the most largest mobile payment platforms in the world. more than 4 million people that didn't have a bank account now do have it through the mobile phone. they don't have to go to any bank branch to open an account. they can do it on their phones and they can already pay, you know, echlt commerce

transactions. they can do a lot of things. and there are thousands and thousands of cash in and cash out points. so the traditional banking also played a very important role. but also other ppps with the telecom sector or technology companies. for example, companies that had business of charging the mobile phones with money, so like the prepaid cards and stuff like that, they moved also to the payment system thanks to the new regulation. so the payment services increased dramatically. but to increase the demand of payment services, we also needed a new way to increase echlt commerce policies. so columbia is growing very fast in terms of e-commerce. there are new players in the

market that really justice to the reality of koum bea. companies like there is a company called rap pi. in columbia people are very, verilize. people don't go to the supermarkets. there is a lot of bunch of pop and mom shops. so how you reconnect those mom and pop shops through the consumer through this app. raf pea is one of the largest e-commerce services in columbia and that really helps payment systems through. again, the government in distributing the subsidies through those payments, that's part of the success of columbia. >> okay. this is a question for both or either. what factors -- i mean, of course we all know or have read that the various factors that can impact financial inclusion. one way to look at it is the organic view which is that the

technology alone coupled with people doing notice innovations doing it aren't as important as which would happen organicically. another invoice point would be on the opposite end of the spectrum that governments are really the central players and need to be the central players in financial inclusion and then the solutions will follow. i guess i would be interested in perspectives on the relative importance of leadership of just simply, you know, letting the technology do its thing, of public private partnerships. what are the factors that are most fundamentally important or are there factors that are over played in their importance or under appreciate in promoting financial inclusion? >> for me the main factor for the whole -- not only for this financial industry, for the whole economy is talent. and we lack four times of

talent. the first one is the engineers. so that is a problem everywhere including the u.s. we don't produce enough engineers and we don't produce enough engineers that really develop new applications using the -- for the new financial sector. the second type of talent that we lack are women in the industry and working women. and this is not about gender equality. this is about productivity. if women don't work, we are not going to be able to grow the economy. period. that's very simple. and i think, you know, in most countries that are doing this government subsidies that are focused on women, i mean, we've seen the positive results on that as well. empowering women to control the

finance of homes, it's been very, very successful. but also we have to help them to really move formal jobs every where. the third time of talent we need is that we have to change the whole education system. today an accountant doesn't understand block chain. it is worthless. i mean, we have to develop -- there are some account wants who might disagree. >> for all of you accountants out there who don't understand block chain. >> you have to get retrained to that. that's key. so if a doctor doesn't understand what big data is, they are not going to be able to work in the new medicine. so we have to change completely the way we educate people. every single profession, every single professional has to have a little bit of computer engineer. and the four type of talent that we need is leaders. we need leaders that understand

this new economy and how to transform the cooling business into the business and that is also part of what we have to do in the financial sector. >> thank you. camille, your thoughts? >> yeah. in addition to what deego has mentioned, you know, i actually think having spent a couple years at see gap and worked on financial inclusion for a while, i actually think intentional government policy is a really big factor. i've come to kind of really embrace that and i think that that's very, very important. i do think also that coupled with that, though, you have to have an environment that encourages and simulates innovation, and that means you have to have a regulatory environment that also is enabling, enabling of innovation but also providing some guide posts and guide rails for how the financial system can evolve to meet the needs of the base of the pyramid, poor people. in addition, i think when we talk about financial inclusion,

we mostly talk about expanding access to, you know, financial services. but i want to just put a plug in for responsible financial service. and so i think in addition to the other areas that i listed, incompetent you do need to have at least a basic consumer protection framework. >> thank you very much to both of you. i may be telling many people what they will know, but just a quick reminder, so block chain is the technology that under pins things like bitcoin, but bitcoin is merely one of many applications. another term you may have heard is dlt, distributed ledger technology. so it's this idea that you can take a large number of computers, no single one of which is trusted, but yet sort of paradoxically create from that a network which in the aggregate behaves in a trusted manner. and it's a fascinating technology which has implications, certainly in the financial sector, but with also

with in many other applications as well. so i just want to make sure we're all on the same page with that. and so, okay, so this is probably a good time to -- i'll do a wrap up question and then we'll open it to the audience questions. i guess what i'd ask is sort of a future forward looking question. you know, are you optimistic about looking at sort of what's happened in the last five or ten years, there's certainly a proliferation of lugsz and we've seen good numerical progress on the metrics. are you optimistic that we will continue to see, you know, good progressor is there a risk that we'll sort of plateau or fallback? what is your kind of candid view of the next five years of financial inclusion. >> i'm very optimistic because i think we have the tools, which is basically around technology. and we have also young people.

millennials, they have really created. they create that trust easier. so they are innovative on how to use that technology. so i'm very, very optimistic that financial services are going to be growing to the base of the pyramid and becoming a critical factor of reducing poverty. however, there are some risks. as you mentioned, cybersecurity is one of them. that's very, very important. the second risk is how to manage consumer protection. that's very, very important because that -- a breach of data protection or data privacy could really damage that trust. >> so i'm cautiously optimistic, maybe a little less optimistic than deeg oh. i'm optimistic that the services will grow, that the number of

people will grow, will increase pretty dramatically. the caution is around a couple of things. the first is that i still think it's going to be very, very hard for extremely poor people to get into the financial services system and i just don't think we've cracked that. i think it's also going to be very hard for women, poor women in particular to be included and still, you know, i'm not aware of really big gains in some of the countries where that has been a persistent problem. so i think that's a problem. and then i also am cautiously optimistic because i think as you grow these services, there's also potential for scandal, right. and there's been a lot of growth of dimming tale offered credit services, and that offer is opportunities for scalps and all kinds of consumer abuses. i think also the fact that credit bureaus operate a little differently and that that might be opaque to consumers also offers opportunities for things

to go badly for them. and then finally, the advent of using social networking data to make credit decisioning is a little creepy and i think it needs tom guide rails if we are to use that as a way of including more people in the formal financial system. >> thank you very much. so we'll open it up to any questions that you may have. so we have some microphones available. so in terms of if you have a question, just raise your hand. my one request would be if you could, you know, briefly state your name and which organization you're with and my other request would be to please ask a question. so that would be -- and to do it rapidly enough that we have time to answer the question. so anyone -- gentleman in the front and anyone else, you can raise your hand and we'll get to you. okay. i see someone else. >> thank you.

larry check oh, check oh communications. bitcoin, an advantage or disadvantage to this whole concept of inclusion? and two, it seems that america here in the states, we're acting at cross purposes. is under siege right now and i think it's been wonderful consumer protection agency that's been -- it's not gone away, crass straight. so how can we get more people in plus the enact that banks have not been honest brokers for a long time and there's that trust issue that deeg oh has been talking about. so if you can just address those. >> i actually might talk about bitcoin too. so, you know, i think bitcoin is really distinct from block chain technology. the latter two i think have some potential to be really interesting in the financial

inclusion space, particularly as deeg oh has mentioned when you're talking about using property as a way of evaluating who you are, et cetera. i actually think there's a lot of potential with block chain and distributed lenler technology that could be very useful to, you know, property claims and all kinds of claims and then also just validating who has done what with money, right. and also just maybe making it a lot easier and a lot less complicated to move money from point a. to point b. so i think there's opportunity there. on the cfpb, it has been a political football for a really long time. i think the folks who work there are used to that. and it does seem like the political terrain right now is pretty complicated so that it's not entirely clear to me that

given the list of priorities that the current administration wants to work on that the cfpb would be at the top of that list. >> any thoughts? >> you know, i think in terms of detail currencies, very, very possible. i think that they are a must, but bitcoin, i'm not sure. so i think central banks have to learn how to operate and regulate detail currencies. it dramatically is going to improve the efficiency of the whole operation of money in the countries. but they have to work on a clear governance of those detail currencies. and that's the brunt of bitcoin of the so if you go to a central bank in mexico or brazil and you

talk to them about the currencies, you talk to them about bitcoin they say automatically, no, because they don't have any control over that. so creating that right governance, it is going to be complicated. but to create a governance, you need talent to do that and not only just the leaders of the central bank, you need the whole financial community to understand that so you have to, again, go back to my point of talent. if people do not understand what block change is, nobody is going to support any initiative of moving to detail currencies with the central bank or very, very few people. so in order to create that trust, we need people to understand the power of these new tech nolgs and the security and all the implications. and also the regulation. we are moving from static regulation to dynamic regulation and that dynamic regulation is going to be based on allege rhythms because today is just a very, very simple regulation in

every part of the industry. the new economy is based on allege rhythms. the regulation is going to be based on allege rhythms as well. but how come you as a regulator is going to issue an algo rhythm regulation if you don't know what an algorithm is. so we have to still work very hard on training people in this new economy. >> and just if i can add, i've got a question there and here. let me add a quick we're talking about these terms there's an opportunity for confusion. a digital currency you can contrast that with paper but a digital currency is a class that could include a crypto currency like bitcoin, but it is certainly possible to conceive of digital currency in the way -- it is certainly true that bitcoin is an example of a particular class of digital

currency often called a crypto currency where is the manage is distributed in a different manner. the governance issues relating to centralized digital currencies, in other words, an entity like the government could issue its own currency and do it in a centralized way but still digital, that is very different from a government standpoint than a truly distributed currency like bitcoin. the other thing i'll say about bitcoin is i'm a big believer in the potential of block chain but i also sometimes see its potential over played. i don't think that block chain is the solution to all problems. and so there are use cases where it's a great solution and then frankly there are some where it's not the right solution even though there's maybe some hype that suggests that it is. so with that there was a woman in the back who had her hand up and we'll go to her and after

that there was -- >> hi. ammonia from the philippines. i work with microfinance institution that's trying to launch a mobile money program. and one of the caters you mentioned was access and usage and in our experience those are two different distinct issues. it's easy to get clients signed up and part of that is -- so my question is for the 2017 report how effective are countries in dlaesing this access versus usage gap and in clum bea's experience what has been good strategies and trend to make sure that people below the poverty line are not only in the system but engaged and actively using it to leverage opportunities. >> the columbia -- >> i think columbia because this is not only about giving access to technology but also encouraging other applications, using those financial services.

that's key. so like e-commerce. how you really encourage the growth of e-commerce, how you develop applications for small companies so that they improve their productivity. and part of that is using those financial services. the financial services by themselves are just basically payment systems by themselves. they don't move the needle. so you have to create the whole eco systems of applications where they just play the role of moving money. there is going to be other values from those applications. >> access versus use age or -- >> i agree. i agree with the question. that's very -- has really been an issue. you can have a lot of access and we've shown increasing access, but typically the numbers are that about one-third of the people who are actually signed

up, you know, use accounts. and so there's a pretty big drop-off. and so that means that for whatever reason they're not finding value and as deeg oh says it's about building value. but i think part of building value is really understanding what these customers need. and these customers are going to be very different from customers in higher segments and typically the way financial services react to new customer segments is they take an existing set of products and then they try to move them down market and without actually doing the research that allows you to know what the needs are and how you meet those needs appropriately. >> i guess i'll just add that, you know, the good news is that we've sort of wiesd up. six or serve or eight years ago you would have found some people focused maybe overly on potential access, just the number of accounts created, for example, as a metric. but i think very few people in the financial inclusion community today would use that

number alone as any sort of a global success metric. and so what we often look at is, for example, if you've done at least a certain number of transactions per month, then it sort of counts, you know, more than if you simply have an account that you've never used. it is a core question, so thank you very much. the gentleman up here and then we'll go to the woman in the back. sir, to your right. >> thank you. henry shiff man. i'm a consultant on legal and regulatory reform for ifis. another core question. i think deeg oh suggested that high margins were an obstacle to an access to finance. but hasn't the experience been that all these ngos in particular with very high rates of interest for advanced countries make access to finance possible? you know, in recent years we're talking about 2.5, 3% a month

interest, and that gets funders to fund microfinance. >> what i said was the situation of banking was very happy with high margins and the base of the pyramid has low margins. that doesn't mean that -- of course, you know, in an open economy, you know, you choose what business you want to be in. but like what we're seeing is, you know, when financial inclusion is growing is in places where the new tech companies are growing, either they come from entrepreneurs or from telecom operators or when banks say let's tackle these new markets, as the example i talked about, they said innovate, let's join forces with the fen tech

companies. and i think that combination is very, very important. the traditional panicking, they know the regulations, they know the business. so they have a lot of value to really build together. so banks, they are really working on creating, you know, alliances with these new commerce to tackle the base of a pyramid, and that's been successful. >> thoughts? >> no. i would agree that in a couple of different ways with deeg oh. first of all, i do think that at least globally it's very difficult for banks to go down market and really service those people in a way that makes sense for them in a -- from a p and l perspective, unless they are willing to engage and partner with the fen techs or people who

can bring the cost of service down. a lot of little transactions, it's frequent. you know, if it's not digital, there's a lot of hand holding. and so that makes it expensive. and particularly if you're not going to tweak your products to really work for poor people, then it's going to seem very expensive. the cost is going to seem extremely heavy. i think there where there sob some innovation, actually east africa, kenya, equity bank, frijs, has tried to put together a digital mobile money product and now what they're doing, which is interesting. it's been an interesting experiment is they're getting rid of atms and kind of forcing people to use the mobile money products. and so that will be interesting to see exactly how that works. but clearly what they're trying to do is drive demand for that and try to figure -- and they've

actually created that product for poor people. so i think, you know, it will be interesting to see how that works out, but i think you do have to create those products for poor people in order to figure out how you're going to work the margins. and then you also have to figure out how you're going to leverage technology partners to drive down costs. so i think, you know, i would agree with you a 100% on that. >> so the gentleman in the same row. >> yeah. my name is i used to be head of policy for nas come, which is the it industry in india. just before my question, a couple of comments. we have found discussing this issue of inclusive finance that we need to distinguish between financial inclusion and inclusive finance. sometimes providing the services are not only not -- doesn't do anything, it can actually be harmful. and here this is where one comes into detail. like you have to get back into

some of the fundamentals of even issues like trust. a lot of people in countries such as india and all over developing countries trust banks and financial -- and middle men less than they trust the mobile phone. so our feeling that they don't trust the mobile phone. no. it's the other way around. so that's way it comes back to what you've just said, which is that the -- you know, existing financial institutions are not geared and not interested generally to make the change. and in india we've been trying for ten, 20 years. it was only when the new fen tech people just through e-commerce or whatever grew that we've got pt n's and others. but i won't go into detail. we can talk later. my question to you is to what extent is the issue of identity, you know, digital identity a critical factor in financial, inclusive financial, financial inclusion? as you know in india we have now

put 1 billion people in bio metrics and become very controversial, our supreme court has it. on the other hand, the issue is should everybody have a social security number. it's really as fundamental as that. to what extent has that been a constraint in finding inclusive finance or not? >> i think it's been a huge constraint. i actually do. because, you know, in many, many countries people are very mobile. they don't have, you know, fixed addresses. they don't have identity papers. all those things that are typically required by banks to satisfy, know your customer roles, it becomes a real barrier and so i think it's extremely significant. and i can't stress that enough. so i do think it's important to, you know, innovate in ways that

will allow people who have those characteristics and that profile, basically, which is that they're very transient and they also don't have documentation to be able to sign up for bank accounts and other financial accounts. i agree. >> i think it is one of the main barriers or the main opportunities to financial inclusion. authentication, it is a way to track a person's life, you know, to understand what they do. not a person, an asset as well, which is critical. you know, most of the assets at the base of the pyramid are never registered today. so that's also an opportunity. if you give a loan for a person at the base of the pyramid to buy a motorcycle or a car, you

know, having a detailed track of that asset is also important for the financial sector to increase the productivity of the financial sector. so i think it is a critical. there are different ways to really grow detail i.d. one is what india is doing, which science initiative by the government, traditional by the government moving everybody to detail i.d. but i think one faster way to do it is to the financial sector. so joining forces between the government and the financial sector to create a common platform of the detail i.d. >> i can't help to respond to that. it's an easy way to track peoples life, there's some people who would not necessarily celebrate that. >> that's true. >> and so it's a double-edged sword, and so, you know, you can imagine very reasonable fears, you know, of not wanting to be

in the system like that if that information can be misused. i think we had a question in the back. >> over here. i think we had david here. >> hi. gaifd med even, see gap. one of the areas where digital finance has not really achieved its potential is consumer to merchant payments. that is payments may be made to the consumer from the government, say digitally as i think it was suggested to sort of get customers or citizens used to receiving digital payments, but then the citizens go to the agent or to atm and cash out and go to the measure shant. somehow there hasn't been merchant acceptance or customer made to make electronic payments. do you see that as an iesh in financial inclusion and if so what can you done about that? >> go ahead. >> so i'm going to say i think it's an issue forei insuring th

access to finance grows. so i think there are a couple of different points. the first is that you need to have an ecosystem of merchants who are willing to obviously use the system and in order to do that, you typically have to have a platform, you know, transactional platform that people can plug into. so, you know, and some places that exists and some places it doesn't exist. in some places it could exist but it would be expensive. that kind of thing like a switch platform or some sort of platform lining that has to be ironed out. i think that with the growth of e-commerce, however, we're starting to see movement in some countries. as you know, david, china and, you know, increasingly india are sort of at the top of that list. but i would imagine that places likena will finally come positive board with respect to e-commerce because you have a significant, growing middle

class that will transact there. so i think you will start to get that sort of critical mass of businesses that are willing to take payments online. and i think people will become more comfortable with that overtime. but again, i'm not sure the ultrapoor or really poor people will do that because i think really poor people -- cash is king for them. and i'm not cash is going to be completely out of the system as a result. >> that's exactly what what happened in columbia when we starred to distribute subsidies with mobile payments. we saw that 90% of them cashed out in the next two weeks like, you know, massively in the first three days. so we understood that we need to do create that ecosystem. we needed to work with the local merchants, with the local mom and pop shops so that they can have applications pewsing that money, that electronic money. but one main barrier here is the

-- those measure shants are afraid of being taxed. you have to be really, really smart on what kind of application so that they really feel comfortable that they're not going to move into additional costs, even, though tax costs. so we created a lot of public private partnerships. we moved from 7 to 76% of them connected. we created application for them. we worked with food companies, with beer companies, all kind of companies that were doing business with those merchants to create an ecosystem. and i think we've kplooufd a lot that ecosystem. we still have a lot of room to improve, but we are moving in

that direction. >> i'm really glad to see a question from this side of the room. i was worried i was going to be accused of bias towards one side of the room here. but now would you have e we've got a question. >> i'm glad. i wo hope it's worthy. so i hear a lot of measures that are about liquidity, how many transactions, and that can be good or bad. it depends what the results of those transactions are. i wonder, are there any experiments with measures that are more that of working capital or building credit? in other words, could you have an account that has an compartment say 20% or whatever where they have to keep it in for a while and it's been in real working assets that could be aggregate like a big index fund and people could develop real collateral and then that could be another measure? does that make sense? >> so in the u.s. there are products like that. you know, there are some regional banks that have worked on -- actually, interestingly in markets where you have a lot of

payday lending that have worked on products where you keep a certain amount of the money in. you pay back a certain amount on the credit card, let's say, for instance. you build a credit score, increase your credit score as a result. and you can utilize the savings component as collateral for loans, et cetera. so those products do exist in the u.s. there are other payment cards, for instance, that have something similar, prepaid cards that have a component where you can save money. and so i think there is a recognition that, you know, just moving money in and out is not -- is not the goal of financial inclusion, right. the goal of financial inclusion is financial security, economic participation, et cetera. so there are, i would say, individual companies that have

tried to provide those kinds of products that are useful for people who are trying to build creditor build savings. >> i'm seeing new fen tech companies do that in the region, and that's key, again, of if fin tech world. we have to let them grow and help them grow as well. so in the case of latin america, according to a recent report, there are more than 700 new fin tech companies, and most of them are in this new alternative finance or payment system. but there are like 15 or 20% of them, like a bunch of them working on how to create new ways of building credit records. and i think, again, part of this is let them grow.

let them grow. it is very difficult for regulators, very, very difficult for regulators to do that, but one way is creating a kind of sand boxes, you know. so let's create an environment where they can grow and we have kind of a special or flexible rules for you to grow. and once you have grown, you have a little bit of maturity, everybody understands the business, the regulator and the fin techs and then the regulation could be issued to regulate that business. >> and i'll just add to the thoughts that you put your finger on a really important issue which is sort of how do you measure these things. and one reason people measure just existence of accounts because it's easy. you just ask how many accounts are there. if you try to look at some of the more sophisticated measures it becomes even harder to stifrmel get the data. the other thing there's not a one to one correlation. for example, you can imagine someone who is very included who

almost never makes any payments from an account. they deposit things into the account. the account balance goes up and they're saving. they're not actually spending. but if you decide because this person has not made a payment they're not included then that would be precisely the wrong kks. so your question gets at this kboebl perfectly to solve question. we've measured the easier things but not always the ones that correlate really with what we want. so it's a great point. we have time for maybe one or two more questions. in the back, please. >> thank you. my name is karen is he bone. i'm with fair fax county government. my question kind of follows on the data. you had mentioned early on the number of unbanked or under banked people cross the country in the united states.

i'm wondering, is there a reliable source that if like a local government was interested to kind of know where their community was so maybe they could targeted actions in a certain way that they could drill that number down in a reliable way? >> you know, i'm not sure of more regional statistics, but the fdic is really the one that has traditionally done a study around unbanked and under banked numbers in the u.s. one suggestion i could make is that there is several cities have come together, they're called cities for financial empowerment which have coordinated their approach to financial inclusion. so the main organization is actually based in new york city.

i think it's cochaired by somebody in new york city and then the county -- san francisco treasurer as well. and so that organization should have some statistics on the more regional level or at least the metro level. so you might be able to plug in there. >> one more, last question and then we'll wrap it up. >> hi. i'm judy cochran. i'm with sil international. and i really appreciate what camille had to say about addressing the ultrapoor. and around the world those who are the poorest or the poor often speak minority languages that aren't even recognized by former financial institutions. and i wonder to what extent did this report take language into account with regard to

inclusion? >> so i maybe -- i'm not sure the best way to answer that. the short answer is we didn't pay a lot of attention specifically to the issue of language, with the understanding, though, that in many places the financial services are developed with specific knowledge of the local languages. but as you say, in many of these communities there are minority communities who speak languages that are outside, and that is clearly a barrier to inclusion. and so that is another challenge. it's a great point, and i certainly wouldn't claim that we've really addressed it. butt it's a terrific point. it's in many, many countries in the world we have this. great point. okay. i just want to express my thanks to our panelists and to all of you for a really terrific set of questions from the audience and really great set of perspectives from our analysts. thanks again for taking some

time to be here today. >> hillary clinton talks about her new book this evening, recounting the 2016 presidential campaign and election. c-span will have live coverage of her conversation with her former aide, politics and proes bookstore owner liz sa mus ka teen regarding her memoir what happened. that will be live at 7 eastern on c-span. >> it's that time of year to announce our 2000 sl student cam video documentary competition. help us spread the world to middle school and high school students and their teachers. this year's theme is the

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