On 20th February, AGE was invited to join the panel entitled “Digitalisation in finance: A driver of financial inclusion” during the high-level conference on Financial Literacy, Resilience and Inclusion organized by the European Commission and the Belgian Financial Services and Markets Authority under the auspices of the Belgian EU Presidency.
The session was moderated by Paulina Dejmek Hack, Director for General Affairs, DG FISMA, European Commission and the panel was composed of:
- Wim Mijs, Chief Executive Officer, European Banking Federation
- Tom Arends, Chief Executive Officer and Co-Founder, Peaks
- Colleen Dube, Chief Executive Officer, Irish National Adult Literacy Agency (NALA)
- Anne-Sophie Parent, AGE Platform Europe
- Mindy Parkkinen, Laureate of the Youth Policy Dialogue on the Future of Finance
The audience gathered Mairead McGuiness, EU Commissioner for Financial Services, Financial Stability and Capital Market Union, representatives from EU and national financial authorities, the banking industry, adult education providers and consumers groups.
Here are some of the main points raised by AGE during the panel discussion:
Digitalisation in finance is a challenge for many consumers
Ms. Parent stressed that the issue of financial inclusion needs to be addressed along with the broader issue of digital inclusion. While many consumers of all ages may own a smartphone, only a small percentage use it for mobile payments. Significant population groups – among whom older persons – face challenges to use online banking services on their own (46% of adults in Belgium and one in six in the Netherlands). The lack of accessible solutions to cater for the need of citizens with no or low digital skills is a serious issue. Ms. Parent reminded the audience that the European Accessibility Act (EAA) applies to digital financial services and has to be implemented by June 2025. The EAA will be a key driver to digital financial inclusion across the European Union.
Financial inclusion is a matter of trust and choice
In addition to the lack of accessibility of many digital retail payment instruments, another major barrier to digital financial inclusion is the lack of trust: many consumers – not only older persons – do not feel confident enough to use digital financial services or do not know where to call for help in case they make a mistake or are victim of fraud. Digital financial services are not tailored to all needs, and consumers should also have access to alternative, more inclusive solutions.
Easy access to and mandatory acceptance of cash are essential
Digitalisation in finance should not lead to a cashless society. Ms. Parent welcomed the European Commission legislative proposals which clarify the legal status of euro cash and establish the legal framework for a possible digital euro s a complement to euro banknotes and coins. Cash is currently the only form of public money and as such needs to easily accessible and accepted as a payment mean both by private merchants and public authorities. Maintaining an efficient cash infrastructure across the EU is needed to foster financial inclusion and make the EU retail payment ecosystem more resilient notably to cyber threats.
Enabling consumers to make informed choices is useful, but not enough
“No one has a crystal ball”, stressed Ms. Parent. “We are living in a world of growing uncertainty, where no one can predict if an informed choice made today will deliver its expected results in the future, as many pension-savers experienced during the last financial crisis.”
Anne-Sophie Parent
Consumers need better protection against fraud
Fraud in digital payments has increased a lot in recent years, and today everyone is at risk, even savvy consumers. Those facing digital financial exclusion are even more vulnerable to fraud and cannot be blamed when they fall victim of AI enabled impersonation fraud or investment fraud. To rebuild consumer trust, better consumer protection including for victims who have been manipulated by fraudsters is needed.