13. 12. 2019 session : “ central banks, financial inclusion and digitalization : harnessing technology for inclusive growth ” conference “ financial integration and inclusive development : a view from the mediterranean countries ” / banco de espana e instituto del mediterraneo ( iemed ) pablo hernandez de cos governor good morning. it is a privilege for me to chair this panel on the importance of financial inclusion and how digitalisation can contribute to it. it ’ s all the more a privilege given that the panel includes governors from four countries with broad experience in promoting financial inclusion, where significant initiatives in this area have been launched with the central bank taking the lead. access to financial services continues to be a primary problem globally. on the latest world bank estimates, almost 1. 7 billion adults do not have access to an account offering basic functionalities and, therefore, they are excluded from basic services such as payments, credit and saving. this has obvious repercussions for economic and social development, as there is a positive correlation both with growth and employment1, and it is thus essential to understand the causes behind it. in this respect, most studies have highlighted the fact that, although there may in specific cases be voluntary factors relating mainly to cultural or religious aspects, the explanation for this lack of access to financial services is usually to be found in involuntary factors. these include most notably a lack of funds for saving, cost, distance from the nearest branch, a lack of education and the absence of the financial infrastructures needed to improve the availability of financial services. it is indeed here where new technologies can contribute decisively to overcoming or lowering these barriers. technology can reduce many fixed costs, traditionally associated with the development of financial services, while providing for a greater adaptation of supply on the basis of each society ’ s idiosyncratic characteristics. unsurprisingly, then, the technological proposals linked to financial inclusion hail from different areas. we can find them in traditional financial institutions, in the new fintech companies, in telecommunications corporations and in the large technology consortiums known as bigtech. as to scope, one of the activities concentrating the bulk of the initiatives is payments. thus, in the past decade we have seen so - called mobile money – i. e. transactional services offered mainly by mobile operators – become commonplace. adding to these, more recently digital wallet solutions have emerged with multiple functionalities and specific proposals for international remittances. aside from the progress in payment solutions, developments on

our external competitiveness, to increase our per capita income and quality of life, and to improve the conditions of the most disadvantaged groups. in many respects the current situation of labour protection can be equated with the trade protectionism characterising the spanish economy until the late 1950s. during that period, import tariffs and quotas were very high in comparison with those in other developed countries. the belief until then was that trade protectionism shielded spanish firms and workers, but nothing was further from the truth. the goods sold in spain were expensive and of poor quality, workers'wages were so low that attempting to hold down two jobs was the norm and the level of per capita income even fell relative to that of our trading partners. the situation changed radically with the opening up of the spanish economy, when we began to resemble other developed countries. indeed, this process, which started with the 1959 stabilisation plan and culminated in accession to the european union in 1985, has seen spain successfully converge on european standards of living. the opening up of the economy did not only not lead to the disappearance of industry and agriculture ; it also raised spaniards'standard of living significantly. in short, what was apparently a singular system protecting us was leading us down the road to disaster. it was not until an acute crisis hit us hard at the end of the 1950s that we realised that what distinguished us from other countries and what we thought was protecting us was actually achieving the opposite. it is now precisely in spain, where employment protection purports to be in good health thanks to the high unemployment severance packages on top of government benefits, where labour shedding in the face of the current economic crisis is proving fiercer than in other countries. for this reason we should study the experience, for example, of austria and denmark, whose labour market reforms can offer us some ideas for reform at home. in denmark, where the unemployment rate is 4. 1 %, the authorities opted to improve regular benefit payments and to practically eliminate redundancy payments. in austria, where the unemployment rate is 3. 8 %, firms set up an individual fund for each worker which becomes available if workers loses their job, acting as a top - up to government unemployment benefits. when workers find employment in another firm, the unused portion of the fund goes with them and starts growing once again with the new firm ’ s contributions. at the end of their working life, the funds available are an additional source of retirement income. the virtue of