Strengthening Financial Inclusion through the Digital Financial Inclusion Supervision (DFIS) Programme

Financial Sector Authorities (FSAs), including regulators, supervisors, and policymakers, play a crucial role in shaping the financial landscape and ensuring the stability and inclusivity of financial systems. But their capacity-building needs are often overlooked. Recognising this gap, Digital Frontiers, in collaboration with Toronto Centre and the Consultative Group to Assist the Poor (CGAP) with support from the BMGF, launched the Digital Financial Inclusion Supervision (DFIS) programme in 2020. This ground-breaking initiative aims to empower FSAs with the knowledge and skills required to make informed decisions, manage risks, and promote inclusive digital finance while maintaining financial stability. 

Since its inception, the DFIS programme has made significant progress in course development and deployment. In 2021, the course was transformed into an online format, named Digital Financial Inclusion Supervision 1.0 and Digital Financial Inclusion Supervision 2.0, to address barriers such as gender inequality and lack of financial resilience. The programme places explicit emphasis on financial inclusion and gender inclusion, enabling FSAs to adopt a holistic approach to supervision. 

The number of FSAs benefiting from the DFIS programme has steadily increased. In 2021, 53 FSAs successfully completed the DFIS Supervision 1.0 course, with 60% of participants identifying as female, exceeding the annual target of 35% female participation. In 2022, this number rose to 258 FSAs, representing a remarkable achievement of the annual target of 245 supervisors trained. The programme’s impact is truly global, with the vast majority of participants hailing from low- and middle-income economies. 

To progress to the DFIS 2.0 course, FSAs must either pass the DFIS Supervision 1.0 course or write and pass the DFIS Foundations Exam. In 2021, 17 FSAs passed the supervision exam, while an additional 57 authorities achieved this milestone in 2022, indicating a threefold increase. These successful candidates become eligible to enroll in the DFIS 2.0 course, which delves deeper into emerging regulatory issues such as open banking, big data, gender-sensitive supervision, data protection, competition, consumer protection, and innovation facilitation. 

One notable achievement of the DFIS programme is its commitment to linguistic inclusivity. Recognising the importance of accessibility, the DFIS 1.0 course has been translated into French with support from the UN Capital Development Fund (UNCDF). This translation project enhances access for French-speaking professionals, particularly in West Africa and Egypt, ensuring that a broader audience can benefit from the programme’s valuable content. 

The impact of the DFIS programme is evident in the testimonials of its participants. Syed Mohammad Sadat, Joint Director of the Bank of Bangladesh, credits the programme for enhancing his supervisory perspective and empowering him to implement action plans and regulatory impact assessments in his institution.  

Other participants, such as Sisay Tesfaye Bekele, Manager of EthSwitch SC, highlight how the DFIS programme has equipped them with knowledge and means to contribute to overall financial inclusion through their products and services. 

The DFIS programme also fosters collaboration and knowledge sharing through its Communities of Practice (CoPs). These CoPs provide a platform for FSAs to exchange experiences, insights, and best practices. With four regional CoPs covering 41 countries and one global CoP, these forums have already convened 61 meetings with 681 professionals in attendance, surpassing the targeted number of CoP meetings by the end of 2022. The DFIS CoPs have facilitated deepened knowledge of DFIS topics and have served as valuable resources for FSAs to apply their learnings in their professional roles. 

Jacinta Anyinge, Senior Principal Legal Officer at the Bank of Uganda, program alumna, and DFIS CoP facilitator, exemplifies the programme’s impact. Using the knowledge gained from the DFIS courses, she spearheaded the legal work for regulations under Uganda’s National Payment Systems Act, as well as integrated practices on stakeholder engagement in the drafting of the regulations. Currently, three innovative companies are testing their products within this regulated environment with the supervision of a regulator. 

In addition, she has extended her expertise to support the Central Bank of South Sudan in establishing laws governing national payment systems, leveraging connections made through the DFIS CoP. 

“The community of practice has a number of participants from various countries, so we are able to share knowledge. Because when you’re drafting a law or coming up with a policy you will always have to answer the question of ‘Who else is doing it?’ and ‘Why are they doing it?’ So, it is easy to get this information from the members. You just send a WhatsApp and ask them ‘Kenya, do you have anything in this area?’ ‘Tanzania, have you done anything in this area?’ and you’re able to get real time feedback to guide you in policymaking,” says Anyinge. 

The DFIS programme fills a critical gap in capacity-building for Financial Sector Authorities (FSAs), enabling them to navigate the challenges and opportunities presented by digital finance. Through comprehensive courses, an explicit focus on financial and gender inclusion, linguistic inclusivity, and vibrant Communities of Practice, DFIS equips FSAs with the necessary knowledge and skills to promote inclusive and resilient financial systems. As FSAs continue to apply their learnings and share best practices, the DFIS programme paves the way for enhanced financial supervision and the achievement of broader financial inclusion goals. 

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