27.10.2017 - 20 by 2020: Technical Assistance Facility supports digitization of financial services offered through postal networks worldwide
The
FITAF will advance financial inclusion by accelerating the digitization
of postal financial services and increasing their uptake.
The Universal Postal Union (UPU) has recently established a
Financial Inclusion Technical Assistance Facility (FITAF), which will
receive significant support from Visa. As Stephen Kehoe, Head of Global
Financial Inclusion at Visa Inc., explains, “Visa’s partnership with the
UPU will make a significant contribution to financial inclusion. This
systematic effort to leverage Posts’ services, size and reach will help
build the comprehensive digital network needed to benefit whole
societies, and especially help reach two priority groups of unbanked
people: rural poor and women.” FITAF was created by the UPU to advance
financial inclusion, by accelerating the digitization of postal
financial services and increasing their uptake, to reach last-mile
customers and businesses.
In order to increase the number of postal accounts by 250 million by
2020 and support the launch of digital financial service projects for
financial inclusion from 20 Posts, FITAF will champion postal action on
inclusive digital financial services, conduct research to identify key
actions and provide qualifying Posts with technical assistance to
improve and expand their capabilities. “This partnership is a key
milestone in our efforts to position the postal network as a critical
tool for delivering economic and social development to all,” emphasizes
Bishar A. Hussein, UPU Director General. “Thanks to its universal
coverage, to its long history as a financial actor and to the trust it
holds amongst the citizens of the world, the postal sector is in a
unique position to provide access to financial services to all and
especially the underserved. We need to leverage that unique position.”
The situation
Over 2 billion adults worldwide were unbanked in 2014. Of those that
are banked, 19% have an account at a Post, making the postal sector the
second largest contributor to financial inclusion after banks. Postal
networks are well positioned to meet the financial needs of some of the
world’s hardest-to-reach populations. “Governments and international
development stakeholders increasingly see the postal network, with its
ability to deliver to everyone, everywhere and at all times, as critical
infrastructure to achieving a whole range of public services and
policies, including their financial inclusion objectives,” explains Siva
Somasundram, UPU Director of Markets Development and Regulation.
Indeed Posts have extensive, government-backed networks that reach
across countries into both urban and remote rural areas. They provide
numerous services – including financial services – to customers of all
income levels; they often distribute government payments, such as
pensions or social support; and their public, egalitarian mission makes
their services affordable and accessible to all segments of society.
However, significant investment and transformation is required to
improve postal capacities and services, so as to be able to deliver
digital financial services and reap their many benefits.
The FITAF approach
FITAF will provide technical assistance to help Posts launch new
digital financial services at a national level. Assistance will be
offered according to need, based on requests from post offices, local
levels of digital delivery, and the type of issue – such as product,
network (e.g. back office) and systems (e.g. postal network, IT
infrastructure). The criteria for selection include: commitment from the
Post’s management and from government leaders; the existence of a legal
and regulatory framework to enable the Post to deliver financial
services; evidence of innovation; and willingness to co-fund 20% of
costs. Support will also include designing mobile-based strategies for
the Post, expanding Post-owned services, and capacity building.
The Facility carries out research to inform and advance Post-based
financial inclusion. This includes developing case studies and best
practices, identifying service and quality gaps, and creating a
readiness guide to help Posts prepare to offer digital financial
service. The Facility will also examine the role of Posts in supporting
the financial inclusion of micro and small merchants near their
branches. A crucial aspect of this work is sharing new insights and
resources with UPU members and other stakeholders through regional and
leadership meetings, as well as at partner events. For example, UPU
organized four regional workshops for members in 2017 to explain the
importance of digitization and to present effective business models and
services.
Partner coordination
Visa joins the Bill & Melinda Gates Foundation and the UPU in
funding the Financial Inclusion Technical Assistance Facility. Visa will
provide financial support for three years through a charitable grant.
The UPU has collaborated with a number of Visa’s global financial
inclusion partners, including the Alliance for Financial Inclusion and
Better than Cash Alliance, which the UPU joined in 2015. It has also
issued joint research publications on financial inclusion with the World
Bank, UN Women and the International Labor Organization, and
collaborated with diverse service providers at the country level –
policy makers, academics and social-welfare organizations. This
inter-connectedness exemplifies the type of collaborative, coordinated
approaches needed to achieve financial inclusion.
For more information on financial inclusion:
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