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Financial inclusion policymaking in a fast changing world: a personal outlook

A personal outlook on how policymaking in the financial sector will most likely be shaped by technology, climate change, migration, as well as the place of women and youth.

Photo by Jason Leung on Unsplash

Over the last few years, policymaking for financial inclusion purposes has been influenced by global trends such as the ubiquity of technology, the rising awareness of climate change and the increasing role of women and youth.

I venture to offer a personal and prospective vision of how these trends will be reinforced, sometimes adjusted, but ultimately intertwined.

Technology: bridging or widening the digital divide?

Technology will remain a key driving force, as the digitization of financial services is progressing faster than ever.

On the supply side, FinTechs will continue to challenge incumbent financial service providers (FSPs), while BigTechs will seek to expand towards a deeper integration in the everyday life of individuals, businesses and organizations. Building on the boost generated by the Covid-19 pandemic, digital payments are expected to become increasingly cross-border.

From a consumer perspective, the growing choice, immediacy and ubiquity of financial services will fuel even more competition among providers. It could also pave the way for new business models, as price wars reach their reasonable limit. The increased use of artificial intelligence will translate into considerable wins in terms of easier and frictionless access to financial services. These trends might be even harsher in the jurisdictions with a clear open banking regulation or framework.

However, this technology-driven context might also challenge ongoing efforts to bridge the digital divide. People who live in remote locations, cannot afford to be always connected or have little to no digital literacy, will be more prone and vulnerable to fraud or scams. An incentivized use of technology could help break the barriers of language, financial education and essential technical skills.

The recent advent of generative artificial intelligence adds a challenge to FSPs in combatting money-laundering and the financing of terrorism. In this regard, a robust digital identity framework could be instrumental in strengthening electronic KYC and improving overall compliance.

Regulators will continue to explore or start implementing Central Bank Digital Currencies, while facing a growing need to set up an appropriate framework for virtual assets. Policymakers, on the other hand, will also have to strike the right balance between the growing role of the BigTechs and the data collection needed to fine-tune the products and services.

Climate change and migration: the more, the scarier

Extreme weather events are a stark reminder of the emergency of climate change. For example, three countries in Southeast Africa (Madagascar, Malawi and Mozambique) have been hit in 2023 by cyclone Freddy, considered by the World Meteorological Organization as one of the longest lasting tropical storms. In February and March 2024, Zambia and Malawi have declared a state of disaster over a severe drought linked to the El Niño phenomenon, with Zimbabwe expected to follow shortly. Other extreme weather events (prolonged drought, heatwaves, unusually heavy rainfalls, etc.) have been recorded in various parts of the world, at an increased frequency and intensity.

According to the International Organization of Migration’s estimates[1], there could be up to 200 million ‘climate migrants’ or climigrants by 2050, notwithstanding other sources of forced displacement: rising geopolitical tensions, armed conflicts, food insecurity, etc.

Financial service providers, regulators and policymakers will have to build resilience directly into the financial system, services and strategies, within their respective mandates.

  • FSPs need to assess the specific needs of migrants and provide them with appropriate products and services (payments, remittances, credit, savings, insurance, KYC, etc.).
  • Although discussions are underway regarding the greening of the financial system, pressing calls to action by the scientific community will prompt more regulators to consider implementing better tools and methodologies to gauge and manage climate-related and environmental risks.
  • While initiating, assessing or updating financial inclusion strategies, policymakers will have to take a broader look, by including not only vulnerable people who need access to basic financial services, but also financially included people whose access and usage might be adversely affected by extreme weather events.

Women and youth: access is still needed at the bottom of the pyramid

Continuous efforts by multiple organizations have led to a tangible improvement towards closing the gender gap in financial inclusion. According to The Global Findex database, the account ownership of women aged 15+ rose to74%, up from 47% ten years earlier[2]. This impressive achievement has been made possible by shedding the light on the gender gap and taking action towards this goal. Although there is much room for improvement in the gender department, it is time young people also came to the fore.

The same data source finds that 66% of young people (aged 15-24) had an account in 2021. 44% of them borrowed money, but only 17% did so from a formal financial institution or using a mobile money account.

With a growing demographic dividend (a quarter of the world’s population was between 10 and 24 years old in 2020)[3], young people are a prime target for basic financial services: 66% of them have a financial institution or mobile money account2. Indeed, onboarding this population is easier, as more FSPs reach out to them on social media or in a less formal way. Using simple services can also help them build credit history and be prepared for more complex financial decisions later in life.

However, for them to fully contribute towards an inclusive growth and development, a few points will require special attention from FSPs, regulators and policymakers:

  • financial literacy skills are paramount, to enhance their capability to make a more responsible use of financial services, especially through digital channels;
  • their needs need to be clearly assessed and responded to with adapted products: youth has been recognized as a disadvantaged group[4] and more AFI members should consider them as such in their national strategies and policies;
  • enabling regulatory frameworks can make financial innovation safer for young and vulnerable people and groups.

Overall, amidst a moving landscape and varying constraints, financial sector policymaking over the coming years should primarily consist in becoming more agile. This will ensure a safe and efficient use of technology to consolidate access to financial services for vulnerable people and communities, while tackling new global issues. At national and regional levels, financial inclusion strategies will need to encompass these priority areas, with relevant indicators to assess the effectiveness of policy tools and measure the achievement of policy objectives.

[1] Migration and Climate Change, IPCC (

[2] Global Findex 2021 database (


[4] AFI Members’ Kigali Statement (2019) (

Also published on Medium.

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