Chris Calabia on the Role of Public Policy and Regulation in Improving Access to Finance

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In episode six of Financial Inclusion & Beyond, we spoke with Chris Calabia, the Senior Advisor for Supervisory and Regulatory Policy, Financial Services for the Poor at the Bill & Melinda Gates Foundation. Chris leads the Foundation’s global efforts to promote a regulatory framework that enables digital financial innovation. Previously he was a Senior Vice President and Banking Supervisor at the Federal Reserve Bank of New York.

We sat down to discuss how to drive financial health for the world's poor by improving access to essential financial services through better public policy and regulation. Chris also shared his insights from the Gates Foundation’s efforts to help promote access to financial services among the unbanked, poor and women, especially in lower and middle income countries around the world. Key takeaways from the discussion include:

• There has been focus among policymakers, regulators, central banks, and others, to try to improve access to a financial services account in the past 10-15 years. Despite visible progress, there are still 1.7 billion people globally left without access.
• Evidence suggests that access to financial services can improve economic opportunity for the poor and help them build resiliency against unexpected shocks. Regulation should ensure that providers are able to serve the poor, and welcome new providers such as mobile network operators, fintech companies, and social media platforms into financial services.
• Gates Foundation research found that countries with functioning digital financial services were far better able to deliver pandemic-related relief to their citizens.
• One example of digital solutions helping improve efficiency and access is India, where the government has started to digitalize social welfare benefits. Elsewhere, the Gates Foundation has sponsored experiments to encourage digitalizing payroll in Bangladesh and other developing economies.
• Digital infrastructure, such as digital identification systems, can facilitate various banking functions such as e-KYC and remote onboarding of customers by financial institutions. Other segments of the economy including healthcare providers or the education industry could also benefit from digital identification which will make a huge difference in the lives of the poor.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

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The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.