The Banking Executive Magazine - May 2022 Issue

ISSUE 161 MAY 2022 the BANKING EXECUTIVE 1 Editorial FINANCIAL INCLUSION; AN IMPERATIVE NECESSITY Our world, economies, and markets have all been hit by crises during the last few years. Practically everyone on our globe has been affected whether by the climate catastrophes, the Russian-Ukrainian war, the ongoing food crisis, the Covid-19 pandemic, or political instability. Their impact on the poor, on the other hand, has been more severe, leaving millions even more exposed and at risk. Financial inclusion provides a crucial lifeline for poor and vulnerable people in all these crises. For individuals and small businesses to cope with the multiple repercussions of the pandemic and adapt to climate threats, a wide portfolio of financial options — including government transfers, savings, remittances, credit, and insurance — is vital. For those who have been forcibly relocated, a portfolio like this can help them re-establish a livelihood and gain access to health and education services. By empowering the most exposed communities to capture opportunities and build resilience, financial inclusion is a key enabler to reducing poverty, ensuring equitable recoveries and building a safer and greener world. However, according to the World Bank report, 1.7 billion individuals, including one billion women, do not have access to financial services. This means that about a third of the adult population of the globe lacks the access to financial services that may significantly improve their lives. With the world becoming more fragile and unequal, it is now more crucial than ever to close or at least bridge this gap. In this context, a collective effort and public–private partnerships will be required to move from financial access to financial inclusion; that is, financial services that suit the circumstances of the ones in most need. The private sector has been playing a key role in supporting rapid advancement in digital financial services in recent years, but it cannot do it alone. Governments have an equally important role as well in securing inclusive digital ecosystems, such as building digital identities and boosting digital literacy. This also requires financial sector authorities to develop open interoperable payment systems, as well as financial sector legal and regulatory frameworks that enable digital financial services providers to operate competitively and allow innovations to flourish. There is much to be done, and it will not be easy. Financial inclusion is no longer an innovative necessity, but an imperative necessity. Dr. Joseph Torbey, Chairman - World Union of Arab Bankers