The challenge for regulators is to find ways for fostering innovation while safeguarding consumer protection and enhancing stability of the financial sector, Bangladesh Bank Governor Fazle Kabir said.

He spoke at the 10th G-24/AFI High Level Roundtable held in Washington DC on April 18. Over 100 senior policymakers, led by 30 central bank governors from emerging and developing countries, attended the event where the different aspects of financial technology or fintech were discussed.

“The main concerns of policymakers and industry arise not from the technology itself but from the question of who is applying technology to finance along with the speed of development,” Professor Douglas Arner from the University of Hong Kong said in a presentation.

Given that innovations go together with risks, practical solutions for solving key financial inclusion challenges such as access and usage of high quality financial services need to be put in place, the participants said.

Thus, technology can be used to achieve financial inclusion objectives and create efficiencies in the market in terms of costs, transparency, trust in institutions and provide stronger consumer protection regimes, they added.

Specifically, fintech has the potential for developing solutions to address digital identity for the financially excluded, as well as sharing useful lessons to boost transformation, they said.

“Fintech continues to be the greatest hope in terms of financial inclusion and inclusive growth,” highlighted Patrick Ngugi Njoroge, governor of the Central Bank of Kenya. A law to regulate fintech companies was recently issued in Mexico, said Bernardo Gonzalez Rosas, president of the National Banking and Securities Commission of Mexico.

It is based on five principles -- “to promote financial inclusion, protect consumers, strengthen financial stability, guarantee financial integrity and foster competition among participants,” he explained.

In the roundtable it was said strengthening public-private dialogues to enhance better understanding of the role of fintech in enhancing financial inclusion could be translated into implementing policy and regulatory reforms.

The Alliance for Financial Inclusion (AFI) partners contributed to the meeting by focusing on the importance of knowledge sharing and capacity building among regulators to support the implementation of key policy enablers.