Concept

Fifth International Conference

on Financial Literacy and Financial Inclusion

FINFIN 2019

Digital Finance and Its Impact on Improving the Wellbeing of Financial Services Consumers

Moscow, February 12, 2019

About Conference

The Fifth International Conference on Financial Literacy and Financial Inclusion “Digital Finance and Its Impact on Improving the Wellbeing of Financial Services Consumers” (FINFIN 2019) is aimed at raising awareness and combining efforts of financial market participants on the availability of financial services, financial literacy and consumer protection in order to ensure sustainable development of the industry, improve the regulation of the financial market and increase availability and quality of financial services for the population.

The conference is organized by the Russian Microfinance Center and the Citi Foundation.

The program of the upcoming continues the discussion initiated at the four previous conferences: "The Role of Financial Literacy in Increasing Access to Financial Services: Approaches and Practical Solutions for Financial Institutions" (Moscow, 10-11 February 2015), “Improving Financial Literacy and Financial Inclusion: The Role of Financial Sector in Implementation of National Strategy" (Moscow, February 16-17, 2016), "How to Improve Consumer Confidence in The Financial Market?" (Moscow, February 16, 2017), "Strategies for Financial Literacy and Financial Inclusion: New Opportunities and Risks for Consumers of Financial Services"(Moscow, February 13, 2018).

The conferences were organized with the support of the Russian Ministry of Finance and attended by representatives of the Bank of Russia.

During the previous four years, the conference has established itself as a unique platform for the exchange of knowledge and experience in the area of financial literacy and financial inclusion, which brings together all participants in the financial industry. In addition, thanks to the event for the first time an open discussion on these topics with the participation of financial institutions, state regulatory bodies and public organizations for consumer rights protection became possible. Past conferences have received positive feedback from both participants in the financial industry and the general public.

Among permanent participants of the conference are representatives of Russian financial institutions, Russian and international expert community, in particular, experts on financial inclusion and financial literacy, representatives of the national regulator and state authorities, experts and activists in the area of financial education and consumer rights protection, and journalists from the leading media.

Key speakers at the conference will be representatives of the Government of the Russian Federation; State Duma of the Russian Federation; Central Bank of the Russian Federation; Ministry of Finance of the Russian Federation; international experts - representatives of the Organization for Economic Cooperation and Development (OECD); Global Partnership for Financial Inclusion of the Group of Twenty (GPFI), the World Bank Group; Alliance for Financial Inclusion (AFI); heads of Russian financial institutions and professional associations in the financial market; representatives of telecommunication and fintech companies; Russian and foreign experts in the area of digital financial technologies.

Within the framework of the conference, an annual research is conducted to analyze a certain aspect of the interaction between financial institutions and consumers of financial services. The results of each research are made public at the event in order to demonstrate the current role, indicate the degree of involvement and evaluate objectively the activities of financial institutions in the process of improving financial literacy of the population and expanding access to financial services. Based on the data obtained in the course of the research, practical recommendations are being developed for financial market participants. Materials about the research are widely published in the media. This year, the conference organizers will present the results of the third annual research to the audience of the event.

Every year the conference gathers more than 150 participants, the total number of which for the entire history of event exceeds 700 people.

Since 2017, regional conferences on financial literacy and financial inclusion “FINFIN Region” have been held. Regional events took place in Cheboksary (June 2017), St. Petersburg (April 2018) and Rostov-on-Don (May 2018). At least 100 participants attended each regional conference.

In 2019, the FINFIN Region regional conferences will be held in St. Petersburg (March 14) and in Nizhny Novgorod (April 18).

Goals and objectives of the Conference

Financial literacy of the population in the Russian Federation is still a problem area. Despite the obvious positive changes that have occurred over the past few years due to the consistent policy of the government, the regulator, as well as the educational activities of public organizations and financial market participants, Russian consumers still do not have enough knowledge and skills to receive financial services to obtain financial services for the benefit of themselves and without damage to the economy. According to a study conducted by the Higher School of Economics (HSE) in 2017, 46% of the Russian population recognized their financial illiteracy. At the same time, for the period from 2014 to 2017, the income of Russian citizens decreased by almost 20%. Under current conditions, financial institutions can play a key role in providing affordable — including at the level of understanding and skills to use — financial products and services to the country's population. However, financial service providers themselves often lack the knowledge, skills and experience necessary to develop such products and implement financial education activities for clients.

The development of digital financial technologies offers great prospects for expanding access to financial services and increasing financial literacy of the population and, as a result, has a beneficial effect on the wellbeing of all citizen categories. However, the diversified potential of digital finance is not yet fully evident to both consumers and financial institutions. On the consumer side, there is a psychological barrier. A large number of people, first of all from socially vulnerable groups of the population, avoid new financial instruments, being afraid of losing their savings, or simply not trusting an intangible service or product. In other words, they are disturbed by the lack or complete absence of human contact during the process of selection and purchase of a financial service. In addition, consumers do not always understand and correctly perceive the marketing messages and methods used by financial institutions in promoting new products. The situation is also aggravated by new risks for consumers to become victims of cyber fraud or personal data leakage, which also adversely affects their level of confidence in digital financial products.

As for financial institutions, the main source of the problem is the sharply increased level of competition in the financial market, which forces many of them to focus on the most profitable areas of activity, against the background of which interest is lost to clients with middle and low income levels. In addition, the promotion of digital financial services often does not cover their opportunities for these categories of consumers. Finally, not all financial institutions consider it necessary to pay enough attention to creating consumer-friendly interfaces for online products and services.

The central theme of the Fifth International Conference on Financial Literacy and Financial Inclusion will be the growing role of digital financial services in improving public wellbeing. Digital economy is a new reality. Under the influence of innovative technologies, financial products are becoming more complex and diverse; they are increasingly being introduced through other distribution channels. New financial service providers are actively entering the market. Financial institutions are adapting their business models, turning to cooperation with mobile operators, satellite service providers and fintech companies. In these circumstances, protecting the rights and interests of consumers, based on the transparency of financial institutions, the availability of understandable mechanisms for resolving disputes, the application of consistent regulation and supervision, as well as the support of good business practices, becomes even more important in the financial market.

The development of digital financial services will help to expand the geographical coverage of financial services; ensure transparency of financial flows; reduce the cost of financial services; create new, high-quality financial products that meet the needs of various consumer groups, including categories of the population with limited access to financial services; increase opportunities for informing and advising consumers of financial services through telecommunication channels, online platforms and automated services.

Financial institutions, together with the regulator, will have to adapt industry standards for responsible financial behavior in order to minimize the risks for consumers associated with the transition to digital financial products and services. The focus is on solving the problem of cyber security, which will require an integrated approach and constant interaction of all financial market participants.

In addition, the conference will present the results of a research about the impact of digital financial services and new technologies on improving financial literacy and the wellbeing of the population, including people with low incomes. The purpose of the research is to collect and propose relevant data to the financial community, clearly demonstrating the need to develop and implement financial technologies, by taking into account the level of knowledge and needs of financial services consumers.

In general, the conference aims to publicize and attract the attention of the wide audience to the expanding opportunities and successful practices of financial institutions in improving financial literacy and providing access to financial services for various categories of the population, including low-income people, in the era of digital economy.

Key topics of the Conference:

Standards for digital financial services and consumer protection in Russia and abroad
The ethical aspect of the interaction between financial institutions and consumers of financial services in the digital environment: the use of big data to model and customize financial products
Effective financial education tools for various categories of digital financial services consumers: self-education platforms and mentoring resources
Financial services as a social service: transition to a multifunctional line of services to provide financial management in all spheres of human life
Cybersecurity: protecting consumers' personal data and reducing the risks of using digital financial services.