Ivo Jeník

Digital technology has greatly expanded access to financial services over the past decade. Yet even today, the range and quality of services available to low-income customers remain limited because of constraints in the business models, management culture, and operating procedures of traditional banks. A new generation of fully digital retail banks has emerged and promises to offer more and better services through branch-lite distribution channels that reach underserved areas.

This… Show more

Digital technology has greatly expanded access to financial services over the past decade. Yet even today, the range and quality of services available to low-income customers remain limited because of constraints in the business models, management culture, and operating procedures of traditional banks. A new generation of fully digital retail banks has emerged and promises to offer more and better services through branch-lite distribution channels that reach underserved areas.

This Working Paper tells the stories of three of these banks: TymeBank in South Africa, Kotak 811 in India, and UnionBank in the Philippines. It takes a detailed look into how the selected businesses operate in their markets, what they do differently from traditional players, and how they are contributing to financial inclusion. Show less

The COVID-19 pandemic is making it harder for people around world to sustain their livelihoods. The microfinance providers (MFPs) who serve low-income individuals and small businesses in emerging markets are bracing to weather this storm; however, moratoria and deteriorating portfolio-at-risk rates are putting their liquidity under pressure. Not surprisingly, some MFPs and funders have found themselves gathering around the negotiating table in search of a response to liquidity challenges and… Show more

The COVID-19 pandemic is making it harder for people around world to sustain their livelihoods. The microfinance providers (MFPs) who serve low-income individuals and small businesses in emerging markets are bracing to weather this storm; however, moratoria and deteriorating portfolio-at-risk rates are putting their liquidity under pressure. Not surprisingly, some MFPs and funders have found themselves gathering around the negotiating table in search of a response to liquidity challenges and potential solvency concerns. Based on workshops with nearly 300 participants from 30 countries, this COVID-19 Briefing contains insights for creditors and debtors on ways to effectively manage debt restructuring talks, brought on by the COVID-19 crisis. Show less

Regulatory sandboxes have attracted significant attention for their potential to empower financial regulators struggling with fast-paced innovation. Through a sandbox, regulators can carefully monitor digital products, services and business models in a live testing environment, enabling firms to bring innovations to market more quickly and readily. But when and under what circumstance sandboxes are the most appropriate tool for emerging market regulators to respond to the wave of digital… Show more

Regulatory sandboxes have attracted significant attention for their potential to empower financial regulators struggling with fast-paced innovation. Through a sandbox, regulators can carefully monitor digital products, services and business models in a live testing environment, enabling firms to bring innovations to market more quickly and readily. But when and under what circumstance sandboxes are the most appropriate tool for emerging market regulators to respond to the wave of digital technologies that are disrupting the financial sector?

This guide leads regulators step by step through the decision-making process, including the alternatives to first consider. It then examines the design and implementation factors for creating a successful sandbox environment. The guide is practical, specific, illustrated by country examples and complemented with work templates. It offers readily tips, recommendations and cautions supported by evidence and experience from in-country work from all around the world. Show less

Governments and funders worldwide are responding to the severe economic conditions from the COVID-19 pandemic by delivering social assistance payments to families and individuals. Increasingly, they are turning to digital delivery for disbursements, which has accelerated the demand for financial services providers (FSPs) to be able to open formal financial accounts rapidly and with minimal or zero physical contact with customers. This Briefing provides guidance for those designing and deploying… Show more

Governments and funders worldwide are responding to the severe economic conditions from the COVID-19 pandemic by delivering social assistance payments to families and individuals. Increasingly, they are turning to digital delivery for disbursements, which has accelerated the demand for financial services providers (FSPs) to be able to open formal financial accounts rapidly and with minimal or zero physical contact with customers. This Briefing provides guidance for those designing and deploying social assistance payments to help them work with financial sector regulators and implement social assistance payments that facilitate rapid, remote account opening in compliance with anti-money laundering and counter-financing of terrorism (AML/CFT) rules. Show less

New technologies and business models are upending long-established markets across virtually every major sector, including the financial services sector. Traditional retail banks are joined by a growing number of digital partners and other competitors. One example are digital banks - firms that adopt new technologies to offer more effective banking services. This slide deck sheds light on the digitalization of banking, describes the three new business models, and hypothesizes about their… Show more

New technologies and business models are upending long-established markets across virtually every major sector, including the financial services sector. Traditional retail banks are joined by a growing number of digital partners and other competitors. One example are digital banks - firms that adopt new technologies to offer more effective banking services. This slide deck sheds light on the digitalization of banking, describes the three new business models, and hypothesizes about their potential impact on financial inclusion. Upcoming research will be published on two other broad innovation spaces: fintech start-ups and platforms. Show less

Blog post

Regulatory sandboxes may enable financial innovations that benefit excluded and underserved customers. In most cases, a regulatory sandbox is a framework set up by a financial sector regulator to allow small-scale, live testing of innovations by private firms in a controlled environment under the regulator’s supervision. This concept, which was developed in a time of rapid technological innovation in financial markets, is an attempt to address the frictions between regulators’ desire to… Show more

Regulatory sandboxes may enable financial innovations that benefit excluded and underserved customers. In most cases, a regulatory sandbox is a framework set up by a financial sector regulator to allow small-scale, live testing of innovations by private firms in a controlled environment under the regulator’s supervision. This concept, which was developed in a time of rapid technological innovation in financial markets, is an attempt to address the frictions between regulators’ desire to encourage and enable innovation and the emphasis on regulation following the financial crisis of 2007–2008. Show less

This global research identifies, analyzes, and prioritizes new trends concerning digital financial services, products, and approaches that are aimed specifically at lower-income consumers that have potential impact on financial inclusion in Sub-Saharan Africa (SSA). The primary objective of this research is to flag impactful directions in the policy arena.

More than 20 emerging trends/developments in digital financial inclusion have been identified. The list of trends is based on desk… Show more

This global research identifies, analyzes, and prioritizes new trends concerning digital financial services, products, and approaches that are aimed specifically at lower-income consumers that have potential impact on financial inclusion in Sub-Saharan Africa (SSA). The primary objective of this research is to flag impactful directions in the policy arena.

More than 20 emerging trends/developments in digital financial inclusion have been identified. The list of trends is based on desk research concerning a comprehensive overview of internal CGAP resources, complemented by analysis of other publications (by the World Bank, GPFI, AFI, FinCoNet, standard-setting bodies, consulting firms, academia, national policymakers), news articles, and informal stakeholder interviews. The decision to include each of the trends in this research was based on the following four criteria: (i) frequency of references, (ii) direct impact on low-income consumers, (iii) direct impact on supervisory capacity, and (iv) relevance to SSA. Show less

In 2016, peer-to-peer (P2P) lending in China surpassed the US$100 billion threshold and confirmed China as the world’s largest P2P lending market, leaving North America a distant second. This tremendous growth was driven by a mix of circumstances, including: (i) well-developed saving culture, (ii) low interest yields on savings accounts, (iii) widespread online connectivity, (iv) cheap smart phones, (v) indifference of traditional financial institutions to serving poor individuals and SMEs, and… Show more

In 2016, peer-to-peer (P2P) lending in China surpassed the US$100 billion threshold and confirmed China as the world’s largest P2P lending market, leaving North America a distant second. This tremendous growth was driven by a mix of circumstances, including: (i) well-developed saving culture, (ii) low interest yields on savings accounts, (iii) widespread online connectivity, (iv) cheap smart phones, (v) indifference of traditional financial institutions to serving poor individuals and SMEs, and (vi) benevolent regulation.

For some time, Chinese regulators refrained from interventions and let the industry grow and evolve—taking a “wait-and-see” approach. While this has helped to grow the industry, it has also created some issues and led to a focused regulatory intervention resulting in a drop in the number of P2P platforms from more than 3,000 platforms in 2015 to 2,448 in 2016.

The central government realizes the potential P2P lending has for the neglected retail financial segment, particularly in rural areas. It has been even experimenting with measures to leverage the industry to improve access to finance by the unserved and underserved.

The Brief is written for researchers, development professionals, industry participants, and policy makers interested in crowdfunding and P2P lending, and how those phenomena have been playing out in China in the context of efforts to promote financial inclusion through digital financial services and FinTech. The Brief (i) provides an overview of the crowdfunding industry in China, with a specific focus on P2P lending, (ii) describes the wait-and-see approach, (iii) examines potential significance of P2P lending for financial inclusion, and (iv) outlines policy lessons gleaned from the development in China. It also includes a brief explanation of the terminology used in China to help readers avoid confusion and misinterpretation when trying to understand the market. Show less

A blog post reflecting on the possibility of designing a truly international, joint account.

Focusing on the first four overarching HLPs—(1) Promote a Digital Approach to Financial Inclusion; (2) Balance Innovation and Risk to Achieve Digital Financial Inclusion; (3) Provide an Enabling and Proportionate Legal and Regulatory Framework for Digital Financial Inclusion; and (4) Expand the Digital Financial Services Infrastructure Ecosystem—this report analyses the increasing pace and complexity of innovation and adoption of digital technologies in the financial sector, guided by the… Show more

Focusing on the first four overarching HLPs—(1) Promote a Digital Approach to Financial Inclusion; (2) Balance Innovation and Risk to Achieve Digital Financial Inclusion; (3) Provide an Enabling and Proportionate Legal and Regulatory Framework for Digital Financial Inclusion; and (4) Expand the Digital Financial Services Infrastructure Ecosystem—this report analyses the increasing pace and complexity of innovation and adoption of digital technologies in the financial sector, guided by the principle that policy and regulatory approaches must also evolve and be tailored to country contexts. Show less

A financial innovation! The fastest growing financial industry! The next big thing in finance! Crowdfunding has garnered a lot of attention for its potential to further financial inclusion efforts.

“Crowdfunding” typically describes a method of financing whereby small amounts of funds are raised from large numbers of individuals or legal entities to fund businesses, specific projects, individual consumption, or other needs. It involves bypassing traditional financial intermediaries and… Show more

A financial innovation! The fastest growing financial industry! The next big thing in finance! Crowdfunding has garnered a lot of attention for its potential to further financial inclusion efforts.

“Crowdfunding” typically describes a method of financing whereby small amounts of funds are raised from large numbers of individuals or legal entities to fund businesses, specific projects, individual consumption, or other needs. It involves bypassing traditional financial intermediaries and using online web-based platforms to connect users of funds with retail funders. Crowdfunding typically means (i) raising funds in small amounts, (ii) from many to many, (iii) using digital technology.

The idea of matching people who need money with the people who have money to invest is not new. What is new is the role of technology to make this concept easier and practical. Crowdfunding has the potential to transform retail financial services as the use of technology, increasing connectivity through mobile phones and other devices, the legal and regulatory framework, and constantly changing economic conditions allow new and innovative firms to compete. This competition could foster economic growth and entrepreneurship, especially in countries with less developed financial systems.

Readers will learn about how the crowdfunding phenomenon is mapped globally, what its main characteristics and modalities within the framework of financial inclusion are, and which issues policy makers should explore. The paper is based on a combination of secondary, desk-based research and interviews with stakeholders, including independent researchers, policy makers, regulators, supervisors, standard-setting bodies (SSBs), and development professionals.

This paper is for a variety of stakeholders in financial inclusion, including SSBs that are responsible for the regulatory and supervisory issues relevant to crowdfunding, other global bodies, and development agencies. Show less

A blog post about a (new) program designed in cooperation between CGAP and Toronto Centre.

A blog post about the potential crowdfunding holds for financial inclusion.

A blog post reflecting on the issue of Big Data and crowdfunding discussed at the 7th Annual Responsible Finance Forum held in Xi’an China.

A blog post about the importance of a risk-based approach to supervision.

The new Principles complement the 2010 G20 Principles for Innovative Financial Inclusion, which were critical in drawing global attention to the issue of financial inclusion and spurring initial policy actions.

These 2016 Principles build on that success and reflect significant developments that have occurred over the past six years in terms of: (1) technological innovations in digital financial services, (2) availability of new G20-blessed and international standard-setting bodies’… Show more

The new Principles complement the 2010 G20 Principles for Innovative Financial Inclusion, which were critical in drawing global attention to the issue of financial inclusion and spurring initial policy actions.

These 2016 Principles build on that success and reflect significant developments that have occurred over the past six years in terms of: (1) technological innovations in digital financial services, (2) availability of new G20-blessed and international standard-setting bodies’ standards and guidance, (3) enhanced electronic data quality and availability, and (4) growing awareness of the critical importance of infrastructure, standards, and conducive regulations beyond the financial sector for financial inclusion.

The new 2016 Principles are intended to catalyze country-level actions by G20 governments to drive financial inclusion using digital technologies, including through country action plans. Governments play a critical role in creating the enabling conditions for financial service providers to reach financially excluded customers while also ensuring that risks are mitigated and consumers are properly protected against threats such as fraud, cybercrime, over-indebtedness, and unethical business practices. Show less

The March 2016 GPFI White Paper, Global Standard-Setting Bodies and Financial Inclusion: The Evolving Landscape, builds on the considerable progress in recent years in integrating financial inclusion into the work of global standard-setting bodies (SSBs) and looks forward, examining new challenges in the changing landscape of the digitization of financial services.

In just the few years since the October 2011 GPFI White Paper, Standard-Setting and Financial Inclusion for the Poor—Toward… Show more

The March 2016 GPFI White Paper, Global Standard-Setting Bodies and Financial Inclusion: The Evolving Landscape, builds on the considerable progress in recent years in integrating financial inclusion into the work of global standard-setting bodies (SSBs) and looks forward, examining new challenges in the changing landscape of the digitization of financial services.

In just the few years since the October 2011 GPFI White Paper, Standard-Setting and Financial Inclusion for the Poor—Toward Proportionate Standards and Guidance, recognition has grown as to the impact of the global financial sector standard-setting bodies (SSBs) on who gets access to what range and quality of formal financial services and at what cost. During this period, the SSBs have acted on most of the observations and recommendations in the first GPFI White Paper. There is still far to go, but the advances are noteworthy. Appreciation has also grown as to the important role that digitization of financial services plays in reaching financially excluded and underserved customers, and the implications of this development for the SSBs.

This second GPFI White Paper, Global Standard-Setting Bodies and Financial Inclusion: The Evolving Landscape, aims to raise awareness of the changing landscape, to inform ongoing work by the SSBs and other global bodies, and to promote the integration of financial inclusion objectives into standards and guidance that can be applied effectively at the country level. The audiences include the SSBs and other relevant global bodies, country-level policymakers who apply SSB standards and guidance, assessors of country-level implementation of SSB standards and guidance, industry actors, and development professionals. Show less

A technical note about institutional arrangements for supervision and enforcement of financial consumer protection rules.

In the last decade, Zimbabwe’s financial sector survived the periods of hyperinflation and the collapse of the national currency that led to the adoption of a multi-currency system in early 2009. Consequently, financial sector activity in Zimbabwe has shrunk by more than 50 percent in many segments. In 2015, the financial sector is dominated by the banking segment that is generally stable but faces major systemic challenges: low liquidity, low capitalization, high cost of funds with low… Show more

In the last decade, Zimbabwe’s financial sector survived the periods of hyperinflation and the collapse of the national currency that led to the adoption of a multi-currency system in early 2009. Consequently, financial sector activity in Zimbabwe has shrunk by more than 50 percent in many segments. In 2015, the financial sector is dominated by the banking segment that is generally stable but faces major systemic challenges: low liquidity, low capitalization, high cost of funds with low domestic savings and expensive external borrowing. High credit risks increase the reluctance to lend. At the same time, the technology-driven segments are growing rapidly but regulatory gaps pose significant systemic and entity-level risks. In such circumstances, the Zimbabwe authorities recognize the urgency of establishing a sound financial consumer protection regime and promoting financial literacy. This World Bank’s diagnostic review was requested by the Reserve Bank of Zimbabwe with support of the national government and regulatory bodies. It provides analysis of the legal and regulatory framework in the banking, digital financial services, non-bank credit institutions, insurance, securities, private pensions, and credit reporting segments. Four consumer focus groups were also conducted on financial capability issues. Volume I of the Review summarizes the key findings and recommendations, and Volume II provides comparison with the Good Practices for Financial Consumer Protection. Show less

In the last decade, Zimbabwe’s financial sector survived the periods of hyperinflation and the collapse of the national currency that led to the adoption of a multi-currency system in early 2009. Consequently, financial sector activity in Zimbabwe has shrunk by more than 50 percent in many segments. In 2015, the financial sector is dominated by the banking segment that is generally stable but faces major systemic challenges: low liquidity, low capitalization, high cost of funds with low… Show more

In the last decade, Zimbabwe’s financial sector survived the periods of hyperinflation and the collapse of the national currency that led to the adoption of a multi-currency system in early 2009. Consequently, financial sector activity in Zimbabwe has shrunk by more than 50 percent in many segments. In 2015, the financial sector is dominated by the banking segment that is generally stable but faces major systemic challenges: low liquidity, low capitalization, high cost of funds with low domestic savings and expensive external borrowing. High credit risks increase the reluctance to lend. At the same time, the technology-driven segments are growing rapidly but regulatory gaps pose significant systemic and entity-level risks. In such circumstances, the Zimbabwe authorities recognize the urgency of establishing a sound financial consumer protection regime and promoting financial literacy. This World Bank’s diagnostic review was requested by the Reserve Bank of Zimbabwe with support of the national government and regulatory bodies. It provides analysis of the legal and regulatory framework in the banking, digital financial services, non-bank credit institutions, insurance, securities, private pensions, and credit reporting segments. Four consumer focus groups were also conducted on financial capability issues. Volume I of the Review summarizes the key findings and recommendations, and Volume II provides comparison with the Good Practices for Financial Consumer Protection. Show less

In 2011, only 21.4 percent of Vietnamese adults had an account at a formal financial institution, and only 36.9 percent of all borrowers used a formal lender - both indicators are well below the regional averages in the East Asia and Pacific. The formal financial sector in Vietnam is dominated by banks; however, retail lending is still rather underdeveloped due to often flawed lending practices and low levels of financial literacy among the population. Vietnamese authorities and the civil… Show more

In 2011, only 21.4 percent of Vietnamese adults had an account at a formal financial institution, and only 36.9 percent of all borrowers used a formal lender - both indicators are well below the regional averages in the East Asia and Pacific. The formal financial sector in Vietnam is dominated by banks; however, retail lending is still rather underdeveloped due to often flawed lending practices and low levels of financial literacy among the population. Vietnamese authorities and the civil society have demonstrated a deep commitment to financial consumer protection by continuous dialogue and persistent legislative activities, and yet, much still needs to be achieved. The legal and regulatory framework for consumer protection in the financial sector, and related supervisory arrangements, are at a nascent stage of development. This World Bank’s diagnostic review was conducted in response to a request from the State Bank of the Socialist Republic of Vietnam. The banking, non-bank credit institutions, securities, insurance, and credit reporting sectors were considered as well as financial literacy strategies and programs. The review was conducted by reference to the World Bank`s "Good Practices for Financial Consumer Protection" and provides a detailed assessment of the institutional, legal, and regulatory framework for financial consumer protection. Volume I of the review summarizes the key findings and recommendations and Volume II provides a detailed comparison with the good practices. Show less

In 2011, only 21.4 percent of Vietnamese adults had an account at a formal financial institution, and only 36.9 percent of all borrowers used a formal lender - both indicators are well below the regional averages in the East Asia and Pacific. The formal financial sector in Vietnam is dominated by banks; however, retail lending is still rather underdeveloped due to often flawed lending practices and low levels of financial literacy among the population. Vietnamese authorities and the civil… Show more

In 2011, only 21.4 percent of Vietnamese adults had an account at a formal financial institution, and only 36.9 percent of all borrowers used a formal lender - both indicators are well below the regional averages in the East Asia and Pacific. The formal financial sector in Vietnam is dominated by banks; however, retail lending is still rather underdeveloped due to often flawed lending practices and low levels of financial literacy among the population. Vietnamese authorities and the civil society have demonstrated a deep commitment to financial consumer protection by continuous dialogue and persistent legislative activities, and yet, much still needs to be achieved. The legal and regulatory framework for consumer protection in the financial sector, and related supervisory arrangements, are at a nascent stage of development. This World Bank’s diagnostic review was conducted in response to a request from the State Bank of the Socialist Republic of Vietnam. The banking, non-bank credit institutions, securities, insurance, and credit reporting sectors were considered as well as financial literacy strategies and programs. The review was conducted by reference to the World Bank`s "Good Practices for Financial Consumer Protection" and provides a detailed assessment of the institutional, legal, and regulatory framework for financial consumer protection. Volume I of the review summarizes the key findings and recommendations and Volume II provides a detailed comparison with the good practices. Show less