February 05, 2024

Michael Wiegand with Jo Ann Barefoot on the Barefoot Innovation Podcast

Note: The audio of this episode is a bit imperfect due to some unexpected background noise. We've attempted to reduce this as much as possible. A full transcript of the episode is available for download.

The Bill & Melinda Gates Foundation is famous for tackling hard problems that affect millions of people and finding large-scale solutions that leverage technology. In finance, they’ve been working for years on one of the most intractable problems of all – how to bring everyone into the formal financial system. My guest today leads that work. He is Michael Wiegand, Director of the Gates program on Inclusive Financial Systems (IFS).

Until recently, the vast majority of the people in the world had no access to the formal financial marketplace. One of the reasons was that financial services have always been expensive to deliver, creating financial disincentives to try to serve low-income markets that would have low or negative profit margins. Traditionally, most services were delivered through costly brick-and-mortar bank branches, staffed with costly human personnel, and supported by back-office functions running costly manual processes (or the equivalent infrastructure at nonbank financial companies). In recent decades, that model has been disrupted by digital technology, and then has been upended by the invention of the mobile phone. I like to say the mobile phone is the most democratizing development in the history of finance. In just a decade or so, it made it possible for providers to reach almost everyone, at very low marginal cost, through an infrastructure that’s already in place and already paid for.

The Gates Foundation was one of the early leaders in realizing that mobile financial services could make it profitable to serve customers with low income and low wealth. Working with a wide range of institutions, they have helped to bring more than a billion previously “unbanked” people into the mainstream financial system.

Today, this inclusion work continues and has expanded to problem-solve on the many challenges that arise as these inclusion efforts succeed. My colleagues and I at AIR have a four-year grant from the foundation to work on consumer financial protection solutions in emerging markets, as one part of their multifaceted efforts.

This is Michael’s second time on the show and, like the first time, we recorded our conversation in Singapore, at the amazing Singapore Fintech Festival. He and I were both there late last year and found a few minutes to sit down and catch up. (Here’s our prior conversation, which we had started in 2017 when we first met in the Philippines at a financial inclusion conference at the Asian Development Bank and then continued in Singapore.)

In today’s show, Michael talks about the global evolution of financial inclusion and how the Gates Foundation is evolving along with it. He describes the accelerating interest in digital financial inclusion, and notes that strategies and markets are evolving very differently in different parts of the world. He talks about the rising focus on the need for digital public infrastructure, in areas like digital identity and instant payment systems. He talks about the underinvestment in consumer protection – which, again, is the main focus of AIR’s work with the foundation – and he points to the increasing concern by regulators that they need to improve their own skills and their own technology, to better supervise and monitor the rapidly evolving financial ecosystem. He talks about the continuing need to focus on inclusion for women, and also for people in rural areas. And he explains the barriers to more inclusive and fair finance, including the lack of verifiable income data and, accordingly, the need for income proxies that can be made widely available to lenders. There’s much more – Michael shares a global scan of this complex and dynamic landscape.

Financial services are like the circulatory system of thriving lives. They enable people to buy and sell, to save, to borrow, to protect against financial risk, and, over time, to build stability, and even intergenerational wealth, and thereby to gain health, and prosperity, and widened choices, and the realization of hopes and dreams. They drive the same progress for families, and for communities, and for countries, and for regions. Financial inclusion isn’t sufficient to achieve these things, but it is, definitely, necessary. No one does more to open these doors than the Bill & Melinda Gates Foundation, under the leadership of Michael Wiegand.

More about Michael Wiegand

Michael Wiegand is Director of the Inclusive Financial Systems (IFS) initiative at the Bill & Melinda Gates Foundation. He leads the foundation’s effort to make high quality financial services widely accessible to poor people throughout the developing world. The IFS team works with a wide range of public and private sector partners to foster the development of digital payment systems—such as mobile money—that can reach hundreds of millions of people with the financial tools they need to mitigate risks and capture opportunities to move out of poverty.

Before joining the foundation in 2016, Michael spent 10 years with Standard Chartered Bank. He was most recently the Global Head of Retail Deposit Products, prior to which he managed the bank’s retail banking business across Southern Africa and was the CEO of Standard Chartered Bank Botswana.  He also spent more than six years with McKinsey & Company serving leading financial institutions in the U.S., Australia, Eastern Europe and the Middle East.

Michael holds a PhD in Economics from Northwestern, a Master of Science degree in Public Management and Policy, and a Bachelor of Science degree in Economics from Carnegie Mellon.

More for Our Listeners

We have exciting episodes ahead, including one with Kwame Oppong, Head of FinTech and Innovation at the Bank of Ghana (that’s another that I recorded at the Singapore Fintech Festival late last year). We also have a great show with Simone di Castri and Matt Grasser from the Cambridge Centre for Alternative Finance SupTech Lab, as well as a show with Itai Damti of Unit. And we’re planning to share something special on – what else? – generative AI.

We’re planning some innovations for Barefoot Innovation. We’re aiming to spend more time brainstorming deeply with thoughtful people on what is happening and how to shape it. Do let us know what you most like to hear about!

If you enjoy Barefoot Innovation, it’s important to take a moment to leave us a five-star rating on your favorite podcast platform to help us reach more people. Also please find me on social media to continue the conversation.

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