November 27, 2019

One of the joys of my work is the chance to tap into the genius of the global movement to expand financial inclusion. I honestly was barely aware of this community until about five years ago. Now, it shapes what I do every day.

Today’s guest leads one of the most important institutions in that movement. She is Greta Bull, a director of the World Bank and CEO of CGap, the Consultative Group to Assist the Poor.

We’ve talked on previous shows about the World Bank creating its Global Findex metrics on financial access and setting the goal that every adult on earth should have a bank account by 2020. As of now, about 1.7 billion people still lack transaction accounts at a bank or mobile provider, but hundreds of millions of people have been brought into the system. The percentage with access has risen from about 51% to 69% -- stunning progress. This progress has become possible because people can now be served inexpensively through a mobile phone rather than through an expensive branch. Making it happen, though, is the work of a large network of people and organizations, including the World Bank and CGap, the UN, the Gates Foundation, the Alliance for Financial Inclusion, the International Telecommunications Union, the Netherlands’ Queen Maxima, who is the UN Special Advocate for global financial inclusion, and many more. One of the most impactful players is the Omidyar Network and its affiliate, Flourish Ventures, which backs most of my own work, including our new nonprofit, AIR.

In our conversation, Greta describes the progress and also the daunting work ahead. She talks about challenges in cyber-security. She talks about interoperability -- how to address fragmentation within and between markets, since digital finance is all about scale. She explains the role of e-commerce in driving change in various parts of the world. She talks about the potential role of big tech firms, their strengths in leveraging data, and the challenge of working with financial systems that have an analog-to-digital interface. She talks about the need to help people become financially resilient, so that they can weather shocks without falling so far backwards that they can’t recover. She explains where we are in solving the gender gap in financial access, which continues to be very high.

She also shares insights on how to win what she calls “the long game” ahead, tackling everything from building coalitions to building tech stacks to -- our favorite on Barefoot Innovation -- how to craft the needed environment for financial regulation and supervision. I’ve always found it fascinating that the people who are driving global financial inclusion have made regulatory modernization one of their top priorities. As hundreds of millions of new people come into the financial system, we’ll need more scalable regulatory models than we have today, in order to absorb the expansion smoothly, managing the inevitable risks and being careful not to choke off desirable innovation by accident.

One note for our US listeners. I find that looking at the innovation and financial inclusion models emerging in the developing world offer invaluable lessons for economies like ours. We have higher levels of financial inclusion, but we still have tens of millions of people who can’t connect to the mainstream financial system enough to have thriving financial lives. The emerging economies are leapfrogging us in much of this, because they had much earlier, ubiquitous adoption of mobile phones. They’re also leapfrogging us in some of their thinking about how one would build a financial regulatory system today, if we were starting from scratch with new technology rather than trying to update a highly entrenched legacy system. Lots of food for thought!

More on Greta:

Greta Bull is the CEO of CGAP and a director at the World Bank Group. She has 18 years of experience in development finance, primarily focused on small and medium enterprise finance, microfinance, and digital financial services. She has worked with both financial services providers and policy makers in Latin America, Central and Eastern Europe, Sub-Saharan Africa, and South Asia. Her clients have included banks, microfinance institutions, mobile network operators, and FinTechs.

Before joining CGAP, Greta was a manager for Financial Institutions Advisory Services at the International Finance Corporation. Other career highlights include serving as director of the Finance, Banking and Enterprise Division at DAI Europe and holding senior-level positions at the Eurasia Foundation.

Greta has a Master’s degree in Public Policy from Harvard University’s John F. Kennedy School of Government and an undergraduate degree in International Studies from the University of Washington.

More on CGAP:

CGAP is a global partnership of more than 30 leading development organizations that works to advance the lives of poor people through financial inclusion. Using action-oriented research, we test, learn and share knowledge intended to help build inclusive and responsible financial systems that move people out of poverty, protect their economic gains and advance broader development goals. We research and experiment to achieve proof of concept and extract lessons that can be built to scale by our partners, who apply our insights in the marketplace.

Globally, about 1.7 billion people have no financial account — at a bank, mobile money provider or other formal institution. Even when they have accounts, poor people often find them of little value and leave them unused. The result is that roughly one in three of the world’s adult population lacks the financial services they could use to dramatically improve their lives. They have no savings for a child’s education; they cannot access loans to buy seeds and fertilizers; and they have no insurance to protect them from medical or natural disasters.

A growing body of financial inclusion research shows that when poor people have better opportunities for how to manage their money, over time their income and consumption improve. In Kenya, women-headed households with access to mobile money services increased their savings by more than a fifth. In Malawi, farmers with earnings deposited into a savings account spent 13 percent more on farm equipment and their crop values rose by 15 percent. The evidence is building that financial inclusion is a key enabler for reducing poverty, and for achieving the United Nations’ Sustainable Development Goals of improved education, better health, food security, access to clean water and more.

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We have great episodes coming up. We will have a fascinating conversation with Congressman Bill Foster, who chairs the House of Representatives Task Force on AI — and who, by the way, is a physicist.  We have one on the Gates Foundation project on the Future of the Central Bank, with Michael Barr and Adrienne Harris. I talked with Lamine Zarrad, CEO of Joust. We have a show with Jeff Dyer of BYU about his book, Innovation Capital.  We recorded a show at Money 2020 with Richard Teng of Abu Dhabi Global Market. We have one with Greg Becker, CEO of Silicon Valley Bank, and one with David Reiling, CEO of Sunrise Banks. We’ll have one with Samantha Emery of the UK Financial Conduct Authority. And I’m excited to say we’ll have several shows with heads of US federal regulatory agencies.

Meanwhile, my “world tour” has been busy. I was in Abu Dhabi, and then in Las Vegas for Money 2020, and then in Tokyo for the Honest Conference on AI for Regtech and a range of meetings, and then Singapore for the amazing Fintech Festival of the Monetary Authority of Singapore. The Singapore event attracted over 60,000 people this year! One of my friends noted that it looked like 30,000 were under the age of 35. Times are changing!

In December I’ll be at the ABA Financial Crimes conference in Washington, sharing the stage on AI with Gene Ludwig and Gary Shiffman. And then I’ll be at the Paris Fintech Forum in January. Meanwhile, my AIR colleague David Ehrich will be at the FDATA meeting in Edinburgh, Scotland.

Come to the show notes for more details on all of it, and David and I will hope to see you along the way!

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