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G20’s Vision for Financial Inclusion through Digital Public Infrastructure

Digital Public Infrastructure | Sep 11, 2023

G20 Policy Recommendations DPIs - G20's Vision for Financial Inclusion through Digital Public Infrastructure

In a recent report by the Global Partnership for Financial Inclusion (GPFI) under the G20 India Presidency, the world's major economies have set forth their vision for advancing financial inclusion and productivity through Digital Public Infrastructure (DPI).

The G20's philosophy, "Vasudhaiva Kutumbakam," which translates to "One Earth, One Family, One Future," underscores a commitment to equitable growth and a shared destiny for all.

Despite the growth of digital financial services (DFS), approximately 1.4 billion adults worldwide still lack financial inclusion. A significant portion of this number resides in seven emerging markets and developing economies. Furthermore, there exists a vast financing gap for micro, small, and medium-sized enterprises (MSMEs). This gap is especially prominent for women-owned MSMEs, which account for an estimated $1.9 trillion of the unmet financing needs.

What are DPIs?

DPIs are essentially technological infrastructures that offer interoperable, open, and accessible digital platforms for public and private services. Examples include digital identification systems, payment platforms, and data exchange systems.

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These infrastructures play a critical role in enhancing financial inclusion, spurring private and public innovation, and driving productivity gains.

  1. Foundational and Cross-cutting: Unlike traditional financial infrastructures that cater only to the financial sector, DPIs serve multiple sectors, acting as a base layer for various transactions.
  2. Modular: DPIs promote interoperability, enabling rapid integration and deployment of customizable offerings. They provide the backbone for innovative solutions without the need for individual sectors to start from scratch.
  3. Public Benefit: DPIs are designed with a public-first approach. They ensure equal access, drive public policy objectives, and promote financial inclusion, competition, and innovation.
  4. Digital Services: DPIs are tailored for the digital age, promoting the adoption of digital services and aiding the digitization of the economy. Their services are usually accessed through digital channels, yet they can also enhance non-digitalized services, for instance, through agent networks.

G20 Push for Digital Public Infrastructure

These systems provide critical public and private services that can drive significant societal impact. From Brazil's Open Finance framework, which aids in data sharing and product offerings, to India's Account Aggregator Framework that strengthens data infrastructure through electronic consent, DPIs are redefining the way financial services operate. Other countries like the Philippines and the UAE have also initiated strategies to integrate open finance systems and collaborate on data-driven innovations.

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DPIs can accelerate the DFS landscape, bridging existing financial inclusion gaps. By fostering innovation, lowering transaction costs, and enhancing user experiences, DPIs can catalyze rapid advancements in financial inclusion and productivity. The report highlights use cases in areas like account opening, government-to-person payments, international remittances, and MSME finance to demonstrate DPI's potential.


However, while DPIs hold transformative power, they also introduce new challenges and risks, such as operational, regulatory, and financial consumer protection risks. Effective governance and management are vital to ensure that DPIs bring about the intended benefits without exacerbating these potential risks.

  • Achieving an effective DPI system can be complex.
  • Different country contexts mean DPI models are not one-size-fits-all.
  • New risks emerge, including operational, legal, regulatory, and insolvency risks. There's also the challenge of data and privacy risks, risks to competition, and technological obsolescence.

Policy Recommendations

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The G20's policy recommendations revolve around five key dimensions:

  1. Harnessing DPIs to expedite financial inclusion.
  2. Promoting well-designed DPIs and a conducive environment.
  3. Implementing effective regulation, supervision, and oversight.
  4. Establishing robust institutional and governance structures.
  5. Prioritizing customer protection and inclusivity.

These guidelines provide a roadmap for authorities worldwide, urging them to leverage DPIs to achieve broader financial inclusion tailored to their unique national contexts.

A Balancing Act

The transformative potential of DPIs in reshaping the financial sector is undeniable. They can bridge gaps, enhance efficiency, and pave the way for a more inclusive financial future. Yet, careful consideration and mitigation of associated risks are crucial to harness their full benefits.

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