Such unintended consequences have been further compounded by a lack of clarity around acceptable standards for applying simplified customer due diligence processes, and the fear of steep fines imposed by some regulators for non-compliance with anti-money laundering requirements. These problems will only increase unless the gap between principle and practice is bridged, or else the millions that remain unbanked would bear the brunt of this unintended consequence. These developments also highlight the need for us to rethink the suitability of overdependence on foreign-owned institutions in expanding financial inclusion initiatives in domestic markets or the strategy, to develop ‘domestic champions’ for such initiatives. Focus areas to advance proportionality in practice Allow me to now share three ideas that could further enhance proportionality in practice. First, further coordinated efforts are needed to develop and propagate more widely frameworks for measuring the impact of regulation on financial inclusion. Such frameworks should be able to objectively assess, based on a well-defined and consistently applied measures, how regulation either increases or reduces barriers to financial inclusion. Such barriers could be in the form of reduced geographical access, exclusive criteria to qualify for 2  BIS central bankers’ speeches  financial services, prohibitive costs of financial services or a concentration of products designed only for affluent customer segments. It is important for policymakers to collect data to facilitate cross country comparisons. In particular, the data should measure the impact of proportionate regulation on financial inclusion, financial stability and integrity.
Of importance, this Symposium will culminate in an Outcome Statement that captures the actionable recommendations from deliberations among subject matter experts and key stakeholders over the next two days. It is my hope that the Outcome Statement will at least identify 5 practical and easily implementable suggestions and the statement will be adopted by all participants, and provide us with a clear way forward to execute and deliver the recommendations on “Proportionality in Practice” that make it a reality and make a difference for the 2 billion individuals that remain unbanked. BIS central bankers’ speeches  3  Finally, I would like to also convey my sincere appreciation to our co-host, the Alliance for Financial Inclusion and Toronto Center, for all their contributions to this Symposium. 4  BIS central bankers’ speeches