denton rarawa : financial inclusion in solomon islands remarks by mr denton rarawa, governor of central bank of solomon islands, on the occasion of the presentation of the g2p study findings, honiara, 10 december 2014. * * * salutation : dfat representatives, other distinguished guests – reps from government ministries, commercial bank reps, telecommunication companies, and other financial institutions, nfit members and cbsi, members of the media, ladies and gentlemen, good morning. let me thank you for taking the time to be here with us. today ’ s event is to present to stakeholders the findings of the government to persons ( g2p ) study conducted by the cbsi ( financial inclusion team ) and the united nations pacific financial inclusion programme ( pfip ) with funding assistance from the department of foreign affairs & trade, government of australia. financial inclusion in solomon islands before we listen to the findings, let me briefly explain what financial inclusion means for solomon islands and how we are driving this agenda in this country. financial inclusion is an important agenda in solomon islands and is driven by the national financial inclusion task force ( nfit ) and the cbsi. we will hear a progress update during the session today but let me briefly explain what it means for solomon islands. when we talk about financial inclusion we consider 4 dimensions of : ( 1 ) access to financial services, ( 2 ) usage of financial services, ( 3 ) quality of financial services, and ( 4 ) the impact financial service has on the lives of an individual. the nfit has identified key areas and has outlined strategies and action plans in our endeavour to address the financial inclusion agenda in this country. one key area that was identified was the provision and availability of data, particularly demand side data or market information. this is very crucial for evidence - based policies and market decisions by the private sector. so far few surveys have been conducted by cbsi in partnership with pfip, such as the financial competency survey on low income households, the market vendor survey and now the g2p survey. next will be the financial inclusion market demand side survey. these surveys and those yet to come are aimed at providing better information to both policy makers and the private sector in the area of financial inclusion. g2p aims to improve delivery of bulk payment type transactions. g2p aims at addressing efficiency of bulk payments by the government particularly through the use of digital financial services. i was told that around

the possibilities that new technologies afford to target very specific niches, while steering clear of other activities, such as the business of taking deposits, which entail more stringent regulatory and supervisory requirements. as the report indicates, this can prompt a disintegration of the value chain. we have shifted from a situation in which many users interacted exclusively with a single financial institution to one in which, for example, a user can have an account at a bank, order payments through another provider ’ s interface and use a third party ’ s payment instrument. this situation could potentially lead to some banks losing touch with customers, one of the main strengths of their business model, and being relegated to performing back - office tasks that generate scant value. this is detrimental for the bank in two ways : first, the relationship with the customer is weakened and becomes less stable. second, visibility over the customer is reduced, which hampers the proper estimation and control of risks. in conclusion, digital transformation is not only a driver of cost reduction, it is also critical to mounting a defence against these new competitors. 2 / 5 bis central bankers'speeches the aim is to increase customer loyalty, either by creating tailored products that better cater to their needs, or by developing collaborative solutions between institutions, of which bizum, the well - known instant payment system, is a prime example. in this defensive context, the sector must be able to harness its traditional strengths. we must not forget that banks have customers ’ trust, providing services to practically the entire population in spain. in fact, the covid - 19 crisis has served to remind us of the importance of banking, which has been central to the structuring of the public support measures. as regards the new customer interaction channels, the report focuses on the growing use of mobile devices to take out products and to perform transaction enquiries. naturally enough, the focus is on the importance of apps as a response to the changing preferences of digital users, particularly the younger segment. having an attractive interface and making applications easy to use is no doubt important. but in my view there is an even more critical aspect : the use of customer data. let ’ s not forget, customer data constitute the commodity upon which the fourth industrial revolution rests. financial institutions also have a strong starting position in this regard, having amassed a great deal of information on their customers over the years. evidently, they need to retain access to these data, while always observing high standards of compliance