G20 Summit: World Bank report proposes tech-driven financial inclusion
Covid-19 pandemic, DPI enabled emergency support to be directly delivered to the digital wallets of those in need as well as helped facilitate swift vaccine distribution. The India Stack exemplifies this approach, combining digital ID, interoperable payments, a digital credentials ledger, and account aggregation," the report said quoting United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) and Honorary Patron of the GPFI Her Majesty Queen Máxima of the Netherlands.
In just six years, it has achieved a remarkable 80% financial inclusion rate, a feat that would have taken nearly five decades without a DPI approach, the report said. "Other nations, including Brazil, Estonia, Peru, and Singapore, have similarly embraced DPI models, yielding tangible results that underscore the efficacy of this approach," said Queen Máxima.
The report recommended fostering responsible use of digital public infrastructure to accelerate financial inclusion. It highlighted the linkage of bank accounts, biometric identification and mobile numbers which helped in stepping up financial inclusion rate in India.
"India’s financial inclusion strategy relies on the JAM trinity of Jan-Dhan, Aadhaar, and mobile and integrates digital ID for more efficient account-opening and payment applications for access to financial services. ...The India Stack has digitized and simplified KYC procedures, lowering costs; banks that use e-KYC lowered their cost of compliance from $0.12 to $0.06.
The decrease in costs made lower-income clients more attractive to service and generated profits to develop new products," the report said. While DPIs’ role in this leapfrogging is undeniable, other policies that build on the
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