The Mexican government is intent on fostering dialogue on issues relating to the design of effective policy for financial inclusion and financial education. The inaugural Agustín Carstens Carstens Annual Open Lectures on Financial Inclusion*, hosted at the Mexican National Palace on 17 November 2017, sought to achieve just that – bringing together 300 stakeholders in financial inclusion from across the public, private and academic spheres.
A core aspect to the debate is how to effectively measure financial inclusion. i2i Mexico Country Manager Christine Hougaard was invited to deliver one of the lectures** and she presented a glimpse of the future of financial inclusion measurement.
There is growing consensus that, given so many people either do not use their financial accounts or only use them infrequently, merely tracking account uptake is no longer a sufficient measure of financial inclusion progress. A fresh perspective – centred on understanding actual usage patterns – is needed.
Truly understanding usage requires an appreciation of why people use financial services in the first instance (their financial needs), as well as the various factors that drive usage behaviour. These relate, among other things, to personal characteristics, behavioural tendencies, demographics, income, livelihoods, social context and the economic environment within which people live. Understanding usage-towards-needs then allows measurement of the outcomes of financial service use.
These outcomes are deemed to be the extent to which the suite of products and services used serve people’s underlying financial needs to maintain liquidity, transfer value, build resilience to shocks and meet goals.
As our understanding of the best way to measure financial inclusion has evolved, so too have the data sources available to researchers and policymakers.
Christine’s lecture on Innovative financial inclusion measurements: Tools for obtaining data and developing useful indicators to measure financial inclusion was one of four lectures, alongside presentations delivered by senior representatives of Ideas42, the World Bank, Bankable Frontier Associates and Mexican financial inclusion experts.
View the presentation below to see Christine’s explanation of how novel combinations of data sources are opening new avenues for better understanding customer needs, drivers of usage and the success of financial services in meeting people’s needs. This improved understanding will help answer the key questions driving decision-making for policymakers, regulators and market players.
*The lecture series is a tribute to former IMF exec and finance minister of Mexico, Agustín Carstens Carstens, who is stepping down as governor of the central bank, Banco de México, to assume the role of General Manager of the Bank for International Settlements (BIS).
**The invitation to participate in the inaugural event was extended by the Minister of Finance and Public Credit of Mexico, José Antonio Meade Kuribreña, in recognition of the work insight2impact is doing on alternative financial inclusion data collection and how data can be used to enhance financial product and public policy design.