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July/August 2019                                                      

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Inclusive Digital Future Summit: recap and how to stay involved

The SPTF and the Smart Campaign hosted 275 delegates from 46 countries in Nairobi last month, for Inclusive Digital Future: A Summit on Responsible Finance in Action. The event was a great success! There is nothing quite like energy in the room when great people and great work come together.

This special edition newsletter provides highlights from the Summit workshops, plenaries, trainings, and field visits. Our event page has a full list of presentations, notes, and other resources from the event. Check out #InclusiveDigitalFuture to see what people are saying online and to share your favorite moments from the Summit. Find more photos on the Smart Campaign's Flicker page!

The SPTF always has a great line up of events covering practical topics in the responsible inclusive finance space.  Look for our newsletters in your inbox every month and make sure to check the Events section for upcoming webinars, trainings, and partner events. If you aren’t already on our mailing list, be sure to sign up here!

           Event Highlights

Our Top 5 Takeaways from the Summit 

The Summit featured 40 speakers from two dozen countries, each bringing a unique perspective to the topic of responsible digital finance. This list captures a few of the most important messages from these experts.

1. Digital transformation is necessary and not to be feared, but approach it with intention. 
Digital is a means to an end—stay focused on customer outcomes. Find like-minded implementation partners and design a digital strategy with a clear customer-centric vision in mind. 

Anup Singh of MSC reminded us: “Digital evolution is a reality. It is happening in all industries. The train is there at the station and it’s about to leave. Not boarding the train would be a profound mistake. The degree to which you digitalize should be aligned with your strategy, resources, and context, but not boarding the train would be a strategic error.” 

Raliat Sunmonu added: “Approach digitalization with intent. Know exactly why you want to digitalize and build from there. It is not something to be done casually.”

Read our session recap for Plenary 2: Models for Responsible Digital Transformation

2. Take a proactive approach to shaping the digital future instead of cleaning up a mess in a few years. 
The best protection against digital risks is for all players to commit to standards for conduct, management, and customer treatment. The Universal Standards, and the Digital Credit Standards are vital in this effort. Investors can join the SPTF Social Investor Working Group, mobile money providers can link up with GSMA’s Mobile Money Certification Principles, regulators can use the Model Legal Framework to improve policies, fintechs have the Fintech Protects Community of Practice, and the list goes on! Whatever your stakeholder type, join a global effort to make financial services safer and more effective.

3. Forge ahead to the next inclusion frontiers. 
Digital financial services hold great promise for inclusion but only if we build specifically with the excluded in mind—women, oral customers, people with disabilities, refugees, and others. For example, Beth Rhyne of the Center for Financial Inclusion pointed out that the gender divide is a worrying phenomenon, and that people with disabilities are among the least financially included people in the world. Natalie Domond of USAID cautioned: “If we don’t find a way to bring women and other excluded groups onto this digital highway, we run the risk of creating the ‘Grand Canyon’ of all divides, leaving billions of people excluded from the digital economy.”

Read our session recap for The Next "Last Mile:" Envisioning the Next Wave of Inclusion

4. Data is as powerful as it is dangerous.                                                                           
Edgardo Pérez of Fundación Génesis Empresarial told his workshop: “To err is human, but to make a really big mistake, you need a computer! Be careful with the data you collect and how you use it.” Other speakers offered similar cautions, as well as emerging solutions for data privacy and cybersecurity for financial institutions. At the same time, Summit participants emphasized data as a powerful tool for making better lending decisions, understanding customer needs, and tracking impact. No doubt, this is an area where much work remains to be done.

Read the session recaps and presentations for Getting Data Privacy Right for Digital Financial ServicesData Security Workshop and Model Legal Framework.

5. Partner, partner, partner.                                                                             
“Partnerships are key in helping to offer a greater, superior value to your customers when you as an institution don’t have all the skill sets or technical capacity to offer it,” said Ted Pantone of Turaco. And fintech-FSP partnerships can be mutually beneficial: fintechs can benefit from an institution’s knowledge of their clients, as well as years of lessons learned about what it means to have responsible, inclusive financial practices, said Jeroen Harteveld of FMO. Still, executing such partnerships is often challenging. A partnership will fail unless both parties benefit financially from the arrangement, have the same vision, and are very clear about who has access to the client and in what context.  Ted added, “The partners who are very customer-leaning tend to have a more seamless partnership.” Read more about what can make or break a partnership in our session recaps for Plenary 1: Responsible Digital Finance in Action and Plenary 2: Models for Responsible Digital Transformation.  You can also read more from the SPTF-IFC’s Investor Forum earlier this year, which delved into Innovative Partnerships for Digital Transformation. 

       

NpM’s Hosts Geodata for Inclusive Finance and Food at the Kenya Summit 

In its efforts to promote the use of geodata to increase access to finance, NpM’s Innovator Challenge invited tech and fintech companies to develop geodata-based applications for financial institutions. Such solutions will improve risk management for financial institutions, lower transaction costs, produce better fitting products, and increase outreach to clients in rural areas.

The three winners, Agri-wallet, Apollo Agriculture and VanderSat, presented their solutions, as well as lessons learned from the pilot projects. In addition, data privacy issues with the use of geodata-based information in financial services were presented by the Smart Campaign and MicroFinanza Rating.

“There is great potential in the use of geodata for the inclusive finance sector,” said Catalina von Hildebrand, program manager for G4IFF. “Financial institutions can access an additional layer of information, which lowers the risks and allows to extend financial access to many more smallholder farmers.”

A complete overview of each presentations can be found in the summary of the event

2019 is a Review Year for the Universal Standards

On the first day of the Summit, the SPTF and the Smart Campaign welcomed 30 social auditors and assessors from around the world for a full-day feedback session on the Universal Standards and the SPI4 audit tool. This knowledgeable and active group spent the day providing feedback about how the Universal Standards work in the field so that we can understand their value, as well as areas for improvement. 

2019 is a “review year” for the Universal Standards. We are committed to reviewing the Universal Standards every three years to check the relevance, clarity, and technical soundness of the standards.  Kenya was the first of several feedback sessions that SPTF has organized in 2019 to collect in-person input from experience technical assistance providers.

Read more about our Universal Standards review process here.

                             

Bringing Together Ideas from Diverse Stakeholders

The diversity of the delegates from 45 countries—including 21 regulators and 26 fintechs—demonstrated how our customer-first message has the power to convene and energize actors from every stakeholder group. How encouraging! We love these quotable moments from our delegates: 

On the value of the Summit
“I came to the Summit because Centenary is diving into digital as a delivery channel and I wanted space to consider what our next steps should be, and how to do it responsibly. With digital, you think you’re selling convenience but there is a risk: Digital can tempt people to take credit they didn’t need.  You can destroy privacy, and you can involve clients in something they don’t understand. My key takeaway is that before we ‘go digital,’ we need to understand where people are already using technology and how we can deliver a product that is demand driven.”
-Simon Senyonga, Centenary Bank Uganda

“My institution, FATEN, serves people in Palestine, including refugees. We want to offer digital financial services, and I’ve learned a lot here about digitalization, including the importance of creating a clear strategy before getting started.”
-Yazan Mozzoq, FATEN Palestine

On managing risk
“Data privacy is not only essential for the good of our customers, it makes us a stronger business. It gives us a competitive advantage. Doing the right thing is good business.”
-Wayne Hennessey, 4G Capital 

"As a development bank, one of FMO’s roles is to make sure that today’s bank CEOs know about client protection, responsible investing, and the history of microfinance, such as the crisis in Andhra Pradesh. We should not forget to bring that story to the table, in order to keep the focus on socially responsible investment strategies. It’s about opportunity, but you also have to manage the risks.”
-Jeroen Harteveld, MASSIF Fund Manager, FMO 

On forming successful partnerships
“Financial services providers will be more willing to partner with fintechs if the partnership alleviates a pain point for staff. In this case, the value of the partnership will be clear to staff and it will be easier to set up the partnership.’’
-Maelis Carraro, Catalyst Fund at BFA Global 

“Our most successful partnerships are with financial service providers who are very customer-leaning. When a partner fears that Turaco may be stealing its customers, or isn’t as interested in serving the customer well, or not committed to close communication, it’s harder to partner.”
-Ted Pantone, Turaco 

On being patient
“Understand that digital transformation can’t be rushed. We’ve worked with institutions that have taken 3.5 years to transform, and some that have been closer to 5 and 6 years.”
-Anup Singh, MSC 

“Expect failures! Digital transformation is a significant shift in the culture of any organization.”
-Raliat Sunmuno, Accion Global Advisory Solutions 

Kenyan Providers Provide an Up-Close View of DFS

Four exceptional financial institutions provided our delegates with a first-hand look at digital financial services in action.

Agri-Wallet took delegates to a tea farm, where it demonstrated its mobile wallet by letting delegates practice making purchases with it. Musoni visitors chatted with customer service representatives and learned about several innovative digital products, such as emergency loans, agricultural credit, and school and salary payments. Apollo Agriculture hosted delegates in a rural area of Kenya, where they experienced Apollo’s app and other services from the perspective of agricultural customers. Equity Bank described their impressive digitalization journey and hosted visitors in two branches.

      

Get support for your digital transformation!

Learn more about how to take the first step toward digital transformation through a training or a digital readiness assessment! The SPTF has funding available to support these issues in Africa and the Middle East, Latin America and the Caribbean, and Southeast Asia.

Thank you!

Thank you to everyone who attended the Summit in Kenya. We would also like to thank Luxembourg Aid & Development and the Mastercard Foundation and for their support, as well as our other summit partners, MSC and ADA, for helping to make this event such a success.

                                 

 

Resources and References

Explore the resources below for tools and guidance to help strengthen your social performance management and achieve your social and financial goals.

Universal Standards for Social Performance Management Technical Assistance Database  Universal Standards Implementation Guide
SPI4 Tool SPTF Guidance Notes SPTF Resource Center
 
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