FintechStage Inclusion Forum, Jakarta, 22-24 March 2017
This was the first time my FintechStage friends took their show, aimed at encouraging the development of fintech ecosystems, to an emerging market location. They teamed up with the Bill and Melinda Gates Foundation and the Omidyar Network to produce this three day affair. The first day was a “Level One Project Bootcamp”, in which the Gates Foundation led a discussion of its global initiative to achieve more inclusive payments (and financial) systems. This half day bootcamp was a very, very full program…probably better suited for a longer time, which might have enabled more participant interaction. We also had a very mixed audience of payments experts and payments novices, which made the task even harder! But the Gates team was patient and engaging, and I certainly learned some new things about how Gates is structuring this initiative. The goals are clear: higher volumes, lower costs, more “digital liquidity” for poor people and SMEs. How to get there is less clear, and different countries need to pursue different paths…my payments jargon increased enormously! I learned that the R2A2 Framework is about rails, rules, accounts and apps, and about the challenges of moving from pull to push in payments, to get lower costs and risks. I learned about thick versus thin systems, and about the differences between “real time retail” and RTGS … but beneath all this, what’s exciting about the Gates initiative is that, in many emerging markets, there isn’t much legacy system sunk cost as a distraction, and there is a real possibility to leapfrog to leaner, more efficient systems. The case of Jordan presented here was particularly inspiring, and it didn’t take impossible amounts of time or funding…my only one desire, after this rich day, was to have had more on distributed ledger and cross-border payments…but that’s not what Level One is about.
The next day was somewhat more typical FintechStage, with panels, keynotes, and the like…there was a lot more focus on regtech than in most meetings, which was useful, given the presence of so many regulators. We had four “deep dives”, on Financial Rails, Credit Scoring, ID and NeoBanks (I moderated the latter)…lots of really bright speakers…way too much program, way too little time…particularly compared to the high audience interaction of a typical FTS event…but fortunately there were nice bus rides in Jakarta traffic, and group diners, to catch up and truly dive deeper. One learning I must share is that the “India stack”, which was three layers when I first encountered it, is now at six, and rising…but it would take another blog too long for my brain to handle to explain what that means…ask Sanjay Jain, one of the Aadhar founders, to explain, as he did so well here.
The final day compensated for the middle day, as it was highly interactive, focused on getting regulators and fintechs/startups to talk to each other about how both can work to advance financial inclusion. We had a very interesting Ecosystem Mapping Exercise to see how this diverse group all fit together, aided by the always inspirations FTS artists’ depiction of the 3 days’ dialogue…we looked at specific regulators’ tools, at ecosystem building blocks, and at specific regulatory innovations that have had significant impact on inclusion. Not sure how definitive the outcome was, but the discussion was very lively, and some very good new bonds were made across countries that may get to more definitive achievements in due course.
All in all, a very fruitful three days in a most interesting city…and I even had the chance to visit SME Finance Forum member BTPN’s new headquarters building, which was amazing…parts of it reminded me more of Google than of a commercial bank!