Financial Inclusion, Innovation and Regulation: Meeting the Challenges of Policy Reform and Capacity Building

This paper shares the issues discussed in '2013 Asia-Pacific Forum on Financial Inclusion'. The Forum was held in June, 2013 in Batam Island, Indonesia. It focused on mobile and branchless banking, retail payment systems, remittances, legal frameworks for secured lending, financial identify and data flows, innovative institutional frameworks, financial education, and consumer protection. The discussions yielded following recommendations for financial regulators and policy makers:

• Scaling up of financial inclusion poses several regulatory challenges due to the complexity of the ecosystem and number of actors involved in providing these services. Coordination amongst stakeholders is required to address this challenge;
• Regulators need to understand the risks that the new developments in mobile and branchless banking bring;
• With the evolution of payments and financial system, regulators should ensure that policies are in place to protect consumers, ensure fair access, and handle data privacy issues;
• Economies should be encouraged to develop an efficient and dynamic movables financing market encompassing modern secured transactions law, an electronic registry, a competent movables lending industry, and a diversified range of effective services providers;
• Provision of financial education has great potential to increase the financial capability of low-income population segments.