The Asian Bankers Association (ABA) and Temenos jointly held a successful webinar on “Accelerating Impact Beyond Digitalization of Financial Inclusion” on April 25, 2024.

With more than 500 registered participants from 31 countries, and a sustained live audience of over 260 participants, the webinar featured two Temenos experts, Lynn Petersen, Financial Inclusion Product Director and Ajay Pundir, Business Development Director Payment for MEA & APAC, together with guest speaker, Surya Vedula, VP Delivery at Nagarro. They shared their insights on the impact of digitalization on the financial inclusion process and discussed the challenges and opportunities developing in Asia. The session was moderated by Joseph Daniel Lumain, VP Microfinance & Financial Inclusion Group Head at Rizal MicroBank Inc..

 

SUMMARY

Lynn Petersen, Financial Inclusion Product Director

In her presentation, Ms. Lynn Petersen said that many global challenges have been identified by the Asian Development Bank and The World Bank in the area of financial inclusion.

The first challenge for financial inclusion is remittances because these communities need to send money home to their families or to pay fees for school, for instance. Second is the issue of safe transfer of money which conversely is related to saving. Finally, the third challenge is lending, but to a lesser degree.

Ms. Petersen commended that everybody needs access on one side but financial institutions also need to develop markets, as ADB recommended. However, given the current cost conditions, digital technology could provide the infrastructure to facilitate adoption under a regulatory framework.

Ms. Petersen said that digitalization can be accelerated because according to ADB, 75% of adults already having a bank account or using mobile money, 95% are covered by mobile network and 88% have access to electricity.

While smartphones smooth access; today, vast numbers of women still do not have smart phones. Thus, as a world’s leading banking software provider, Temenos believes that its banking platform also applies effectively in these deprived communities.

Its platform has local partners using local resources. They understand the local environment, the local challenges, and the local language.

Currently, Temenos provides a common software to banks anywhere in the world in a single code and configuration base, deployed on-premise or on the cloud, whether that is Temenos’ public cloud or the banks private land. That means from financial inclusion on the one end of the scale right up to wealth on the other end of the scale, everybody can use the Temenos technology.

With 56 offices in 161 countries, Temenos is ready to implement wide programs supporting financial inclusion, as an introduction into the modern banking system. Currently, the Temenos solution has 367 clients in 53 countries with hundreds of skilled partner consultants worldwide.

For financial inclusion, Temenos offers a flagship core banking system called Temenos Transact which is a pre-configured and deployable in up to 5 months, including data migration and training.

It is an upgradable, mature and trusted solution that provides good customer service, brings customer satisfaction and allows institutions to recruit and retain customers. The solution can communicate with 3rd party applications. For example, payments, payments providers, mobile stores, and authenticators.

In summary, Temenos goal is to provide an access path to financial services to all in order to grow the local economy in a sustainable manner for the benefit of all communities,

 

 

Ajay Pundir, Business Development Director Payment for MEA & APAC

Ajay clarified that financial inclusion is about business which requires three factors to succeed: understanding the target audience, what is offered to the target customers and execution. In that respect, Temenos can really help, especially in the area of payments and value storing.

As the market changes, with fiat money also potentially transforming into an unregulated digital currency flowing and storing on smartphones, digital wallets are also demanding a solid infrastructure where they can be exchanged or stored. Furthermore, since credit transactions normally provide high margin, governments also needs to play a role in financial inclusion.

Ajay mentioned that in recent years, a number of economies have taken millions and millions of people out of poverty, such as in India and Thailand. They have grown tremendously and in order to continue growing, they need digitalization. Thus, store of value accounts are very important yet they are facing risk in their transformation from physical to different kinds of virtual accounts.

Digital currencies are technologies creating business opportunities for financial institutions and they require secured wallets because poor communities also see opportunities and convenience in digital currencies. Crypto wallets and stable coins are also being adopted and there is a market push for more demand.

Ajay mentioned that an instant payment solution was launched recently connecting 10 Asian countries. This solution is very relevant as secure and fast availability of funds translates into a better economic system. A payment, a transaction and its processing are critical to increase revenue growth.

Ajay said that he has witnessed a shift in the consumer segment, starting with inclusion as an initial point, then impacting retail, corporate, business, commercial, corporate and then investment areas.

Thus, financial inclusion must be seen as a step into retail business or commercial segment tomorrow. This process indicates a growth path in the next 5 years for a bank working as fintech. Thus catering financial inclusion customers at a low margin should initially be acceptable for a bank as it shits these customers into larger margins. Ajay believes that Temenos solution has the capacity to translate inclusion into payment transaction.

Ajay argued that Temenos can optimize the process for banks, regardless of the country since Temenos has been developing financial technologies for over 30 years.

 

VIDEO

The recording of the webinar can be viewed at ABA YouTube Channel HERE.