At the 2018 annual meetings of the International Monetary Fund and the World Bank Group being held in Bali, Indonesia, from October 11 to 14, for government finance ministers and officials, including central bank representatives, fintech (financial technology) apparatus and tools were stressed on the first day of these high-level meetings, as the “The Bali Fintech Agenda: A Blueprint for Successfully Harnessing Fintech’s Opportunities” was unveiled to participants.
Fintech is a new industry that uses technology to improve activities in finance and is supposed to increase the access of financial services to users across different platforms. The use of smartphones for mobile banking, investing services and cryptocurrency are examples of technologies aiming to make financial services more accessible to the general public.
The Bali Agenda highlighted several key items for governmental and regulatory agencies to work on in the future to further advance the spirit and cause for smarter and more integrated fintech for underserved and served citizens.
The Bali Agenda primarily proposed a framework of high-level issues that countries should consider in their own domestic policy discussions and aims to guide staff from the two institutions in their own work and dialogue with national authorities. Twelve elements were distilled from members’ own experiences and cover topics relating broadly to enabling fintech; ensuring financial sector resilience; addressing risks; and promoting international cooperation.
“There are an estimated 1.7 billion adults in the world without access to financial services,” said IMF Managing Director, Christine Lagarde.
Lagarde also stated: “Fintech can have a major social and economic impact for them and across the membership in general. All countries are trying to reap these benefits, while also mitigating the risks. We need greater international cooperation to achieve that, and to make sure the fintech revolution benefits the many and not just the few. This Agenda provides a useful framework for countries to assess their policy options and adapt them to their own circumstances and priorities.”
“The Bali Fintech Agenda provides a framework to support the Sustainable Development Goals, particularly in low income countries, where access to financial services is low,” World Bank Group President, Jim Yong Kim, said.
Kim continued: “Countries are demanding deeper access to financial markets, and the World Bank Group will focus on delivering fintech solutions that enhance financial services, mitigate risks, and achieve stable, inclusive economic growth.”
Agreeing with the Bali Agenda on FinTech set out by Largade and Kim, the IMF board of directors fully endorsed the proposals and called on staff to work closely with the standard setting bodies (SSBs) and relevant international bodies, while avoiding duplication and overlap.
They encouraged staff to continuously monitor and analyze fintech developments and consider their implications within the Fund’s mandate, focusing on analytical and country work with respect to cross-border capital flows, financial integrity, national and global monetary and financial stability, and the evolution of the international monetary system and global financial safety net.
The twelve proposals set out in the Bali Agenda’s MoU are as follows:
- Embrace the promise of fintech;
- Enable new technologies to enhance financial service provision;
- Reinforce competition and commitment to open, free, and contestable markets;
- Foster fintech to promote financial inclusion and develop financial markets;
- Monitor developments closely to deepen understanding of evolving financial systems;
- Adapt regulatory framework and supervisory practices for orderly development and stability of the financial system;
- Safeguard the integrity of financial systems;
- Modernize legal frameworks to provide an enabling legal landscape;
- Ensure the stability of domestic monetary and financial systems;
- Develop robust financial and data infrastructure to sustain fintech benefits;
- Encourage international cooperation and information-sharing; and
- Enhance collective surveillance of the international monetary and financial system