Why is financial inclusion an area of interest for the Gates Foundation specifically? How do you believe you can add value here? 

Bill believes that “having the ability to save and transact is something that should be universal”. However, he does not believe that financial inclusion can really be possible with traditional systems due to the high costs of bank branches and paperwork. Bill suggests that using technology to increase financial inclusion would be a possible solution. He uses India, who have developed their own technology, as an example of success, saying that “with a robust system (in India), we can see that you can have digital financial inclusion”. 

The role of the Gates Foundation, as an advocate for those who don’t have access to financial services today, is to ensure that there is technology and standards that are there to help increase accessibility for those people. The foundation is a major funder for two projects aimed to increase financial inclusion. The first project, called ‘Mojaloop’, provides open source software through the financial switch aimed to speed up the spread and accessibility of digital financial services. The second project, a Modular Open Source Identity Program (MOSIP), helps to implement a digital identity system which is valuable not just for financial use but also for health, voting, and education.

What is the role that you see the private sector playing in being able to collaborate with different governments to ensure that we move forward?

The private sector has an opportunity to provide a number of services and applications once the digital money system has been put in place, such as; helping with health, education, or agriculture, giving people visibility to their financial status, or advisory services on financing and insurance. To Bill, the phone will become a connection for low cost interaction with customers who do not require human interaction.

The goal of the Gates Foundation is to make sure that developing countries are receiving the benefits of the digital revolution. According to Bill, in some cases, developing countries receive the benefits of the digital revolution before rich countries as rich countries may have legacy systems that people are so used to that it is hard for them to transition out of. Such legacy systems do not exist in developing countries and therefore the general population can adapt and learn to use newer systems much more quickly. As a lot of these smaller or developing countries are working with partners such as The World Bank and the African Development Bank, the private sector has opportunities to help central banks create these systems and build applications that will use these financial capabilities. 

What kind of reimagination/reinvention do you foresee or hope to see, as far as legacy institutions are concerned?

To Bill, traditional banks are already embracing new technologies and digital systems in order to broaden their customer base, especially on the consumer side. The corporate customers for traditional banks may see the embracing of digital systems as part of the evolutional that may allow some costs to be lowered. However, on the consumer side of things, if these traditional banks are able to adopt a strategy that connects to these systems they will see a dramatic increase in the numbers. According to Bill, he expects to see an increase in support from central banks in the next 5 years as it is a relatively straightforward way that they can get their citizens connected up. Bill states that if people are going to study one country right now, they should look at India because things are really exploding there in terms of innovation around the system. 

Very often we have seen that regulation is unable to keep pace with the innovation. What is the kind of regulatory sandbox that you imagine we need to put in place to ensure that innovation is not constrained due to a lack of/too much regulation? How do you find that balance?

The approach of the Gates Foundation is to involve the central bank because they have a strong desire to maintain control of their currency and have use of local currency while making sure that the system is as secure as possible. Bill states that the aim is making the system as reliable or even more reliable than the system that exists today as well as getting central banks as comfortable as possible with these new approaches. 

As the Gates Foundation is not a private sector company and is not trying to make a profit off of the shift in traditional systems to more high tech/digital systems, the role of the foundation is to be a neutral party between central banks and governments and act as a fair broker to balance between the innovations of the system and the regulations between it. 

Linking the Foundation’s objective of universalizing access to health care services and what you hope to do on the financial inclusion side, where is the point of convergence?

According to Bill, the Gates foundation does put the majority of its funds, approximately 70%, into health related activities. However, recently the foundation has also added new areas in which they are allocated their resources to. The first being the financial services work and the second being in agriculture. 

In regard to financial services, Bill strongly believes that it is critical to share the benefits created by the digital revolution with everyone and make these benefits as accessible as possible. They have hired a team in order to manage open source activities that allow governments to do things that they previously were not able to. Bill states that the work done in this area is complementary to the health work. He provides an example saying that; if a woman who is pregnant needs to get to the hospital, and the government wants to make a payment to her so that she can have transport,  the financial digital rails makes it so that it is feasible for the government to do so in a short amount of time. So by developing and increasing financial inclusion, the health work done by the foundation is also positively impacted in many scenarios. 

Is there a specific set of targets that you have set out for the foundation? What outcomes do you hope to achieve on digital financial inclusion over the next few years?

Currently the foundation is in discussions with the governments of higher population countries including: Pakistan, Nigeria, Indonesia, and Ethiopia to gain a better idea of what their thoughts and views are of digital financial inclusion and how the foundation can help them develop the system quickly. The foundation then helps to create partnerships between the government of these countries and entities such as The World Bank and the African Development Bank who have a ‘toolkit’ so that any country of any size can get the funding and follow a ‘recipe’ to build out a digital finance system. The goal of the foundation in the next 10 or so years is to get 2/3 of everyone in these countries to have access to digital financial services.

What are some mistakes made and some challenges in terms of digital financial inclusion that you believe require some correction as we move forward? 

To Bill, the attempts at digital financial inclusion so far has generally been a positive experience with very few big issues to address. One of the issues that Bill describes was privacy concerns in the Indian identity system, few of which were legitimate concerns and were quickly fixed and the system was strengthened. Another issue that Bill describes is that  the UI for certain applications have been a bit too complicated and hasn’t worked as it should thus have been redesigned and fixed accordingly.  One issue that will require some work is to expand the coverage of the networks into rural areas.