Dynamic Coalition on Digital Financial Inclusion (DC-DFI)

Introduction

In today’s interconnected world, financial inclusion has emerged as a critical pillar of sustainable development and equitable growth. The Dynamic Coalition on Digital Financial Inclusion is dedicated to addressing the multifaceted challenges of financial exclusion. This coalition aims to bridge the gap between technological advancements in finance and the segments of society still alienated from these developments, recognizing that access to financial services, facilitated by open and interoperable protocols, offer the potential to connect existing, diverse financial systems and to build new solutions from the ground up. This is the foundation for inclusive economic participation and growth.

• The Global Challenge of Financial Exclusion

Globally, a significant portion of the population remains unbanked or underbanked. This systemic exclusion has profound implications for individuals and communities, particularly in low and middle income economies. The inability to access financial services not only hampers individual prosperity but also impedes broader economic progress and exacerbates inequality. The coalition seeks to shine a light on these disparities and spearhead initiatives to foster inclusive, open, and interoperable financial systems that work for more people. These technologies directly contribute to achieving the Sustainable Development Goals, particularly Goals #8 (Decent Work and Economic Growth) and #9 (Industry, Innovation, and Infrastructure). By enabling efficient, accessible, and affordable financial transactions, they foster a conducive environment for decent work opportunities and catalyze innovations in industry and infrastructure.

• The Digital Divide and Financial Services

The digital divide presents a formidable barrier to financial inclusion. While digital financial services offer unprecedented opportunities for inclusion, the lack of access to connectivity and by extension technology, or mechanisms of identifying oneself, continues to exclude vast populations. This gap widens the chasm between the financially included and excluded, making it imperative to address digital access alongside financial services. The coalition recognizes the critical need to integrate digital strategies in its pursuit of financial inclusion.

• Systemic Issues and Regulatory Landscapes

Financial exclusion is further compounded by a myriad of systemic issues, including insufficient financial literacy, inadequate infrastructure, and often restrictive or unclear regulatory environments. These barriers prevent the effective implementation and scaling of financial inclusion initiatives. However, the opportunities that interoperable payment protocols present — such as reduced transaction costs, faster processing speeds, and immutability — are substantial and under-explored. The coalition aims to navigate these challenges while maximizing the potential benefits for all stakeholders, including governments, the private sector, and civil society.

• Financial Inclusion Communities Must Learn About Internet Governance

Internet governance processes have been effective because of multistakeholderism: everyone comes together, in good faith, to contribute to the development of standards, protocols, and policies to ensure that the Internet and its many building blocks are available to others on fair, reasonable, and nondiscriminatory terms. While this coalition will advocate for embedding the principles of financial inclusion within the broader framework of Internet governance, it will not seek to disrupt or ignore what the Internet community already does so well. The coalition will promote a technology-agnostic approach that emphasizes universal access, regulatory support for fintech innovations, and the need for robust digital literacy and consumer protection, while acknowledging the importance of the multistakeholder model and the generosity of existing institutions in making available space for this dialogue.

• Setting the Stage for Collaborative Action

As we embark on this mission, the coalition’s action plan is centered primarily around responding to one research question:

How can the adoption of open, global interoperable payments networks overcome existing barriers and leverage opportunities to enhance financial inclusion across diverse stakeholder groups, and how will this shape the evolution of the Internet and digital economy by 2030?

We are now organizing a symposium on digital financial inclusion and Internet governance to be held in April in São Paulo as a pre-event to NetMundial +10, which will result in the production of an issue paper that will inform the coalition’s activities throughout 2024. In addition, the Dynamic Coalition will participate in the Responsible Finance Forum in Fortaleza, Brazil in July 2024 as well as the Interledger Summit in Cape Town, South Africa in October 2024.

The Interledger Foundation will support this Dynamic Coalition in its inaugural year, and will provide funding to support the various activities.

We invite interested stakeholders from across the Internet governance community to join our efforts, and encourage you to contact us for more information or to collaborate with us. It is our vision to work within the existing Internet Governance Forum (IGF) ecosystem to collaborate with existing Dynamic Coalitions to to address policy areas that are not currently within their charter’s scope, and we also seek to engage with traditionally-excluded communities to provide them a hope within the IGF structure for their voices to be heard.