that the risk of financial instability increases when access to financial services is expanded. since 2011, 700 million adults have gained more access to an account at a financial institution or through a mobile device, according to the 2014 global findex report. while this 20 % improvement in access in 3 years represents significant progress, there are still 2 billion unbanked adults – primarily among women, those living in the developing world, and the poorest 40 % of households. directly, if more people use bank deposits, banks could have a more solid funding base especially in periods of stress : a 10 % increase in access to deposits can reduce the likelihood of withdrawal rate of deposits during periods of stress by 20 % or more. bis central bankers ’ speeches the current business models of mainstream financial institutions are generally not geared to offering the kind of small - scale savings, payments, lending and insurance services that are tailored for these excluded households and still profitable for providers. but this is beginning to change at a rapid pace, driven by digital and other technological innovations. individuals in the most remote and poorest regions of the world are becoming increasingly connected thanks to basic mobile phones. and it won ’ t be long before smartphones become available to larger numbers of people, even those of very low income, bringing with them the power of the internet along with other capabilities hard to imagine even just a few years ago. these and other digital technologies are being used more and more to deliver financial services to people who have been excluded. for example, in many african countries the percentage of adults who have a mobile money account is already very significant : 58 % in kenya, 32 % in tanzania, and 35 % in uganda 2. these impressive numbers don ’ t tell the whole story. mobile money helps local economies and spurs economic growth, for example by allowing for faster, cheaper and safer domestic remittances, which are an important economic contribution to rapidly urbanizing developing countries. the digitization of retail financial services also enables a broader range of services to be delivered at far lower cost. mobile payment histories can be used for data - driven credit underwriting for self - employed entrepreneurs, small businesses or individuals who lack traditional collateral. and low - cost, mobile retail payment systems can also enable smallticket crop insurance or the micro - leasing of, say, residential off - grid solar energy units. these would not be economically viable with the traditional transaction cost structure of a cash - based business model. these developments and other nascent technologically based but

functional operations, where very different lines of activity and business cultures are brought together. in addition, assessments have varied across countries, taking into account the specific environmental factors likely to impede necessary adjustments. the fact that, at least until recently, cross - border mergers in europe have been comparatively rare, especially in the retail segment, is difficult to assess. on the one hand, it can be judged positively in that it reflects a prevailing view of differences in business cultures and of limited prospects for increasing profits in the retail sector. cross - border mergers seen to date have tended to take place in regions where certain cultural affinities have been in place. on the other hand, the paucity of cross - border mergers may also stem less positively from obstacles that would prevent the restructuring required to reap higher profits. it is probably not a coincidence that rating agencies have tended to be less optimistic about m & a deals in those cases where the environmental impediments to cost cutting and to the adoption of potentially higher - productivity technologies have been greater. iv. lessons if the foregoing analysis is correct, a number of lessons follow, both for the official sector and for market participants. as noted, the key challenge for the public authorities is to ensure that their policies are supportive of a speedy and orderly restructuring. besides monitoring developments closely, they can make a positive contribution through policy initiative in four broad areas. first, the authorities can lessen the obstacles to the adjustment of labour and capital. some significant progress has indeed been made in reforming labour markets in europe, but this has not been uniform across countries, nor have all the steps taken necessarily been in the right direction. as regards the adjustment of capital, the issues are considerably more complex. in particular, taken at face value the empirical evidence on the benefits of m & as might suggest that an even more restrictive attitude might be justified. if m & as involving financial firms do not add value, and if at the same time the systemic risks inherent in ever larger and more complex firms are increased, then facilitating m & as through changes in take - over or, more indirectly, tax codes might not seem warranted. however, it would be rash to draw such a conclusion in view of the solace it would give to national, rather than european, interests and to the supporters of the status quo. it is particularly important to ensure that it is economic rather than political considerations that guide policy decisions ; and in this context, a number of non - transparent imped