“In navigating waves, always keep in mind that amidst change, opportunities arise.”
Michael Jongeneel | CEO at FMO
This special edition of Future-minded is dedicated to FMO’s flagship event, Future of Finance. Since 2010, we have been bringing together our financial institution clients, partners, and investors from over 60 countries to share their knowledge and make invaluable connections. After having to forego two consecutive editions due to the Corona pandemic, our enthusiasm for its return has only heightened!
For the 2023 edition, we have selected the theme 'Waves of Change'. In recent years, financial institutions (FIs) have faced unprecedented turbulence stemming from the impact of the COVID-19 pandemic and geopolitical disruptions, significantly rattling the status quo. At the same time, FIs encounter considerations such as managing climate risks within their own portfolios, together with the pressing call to support a green agenda. Now more than ever, the integration of technology in customer relations raises the question to all FIs on how to (further) adapt and deal with its complexities.
During our event and in this magazine, we aim to address these dynamics, focused on People, Planet & Tech; providing insights on navigating these waves, always with the outlook that amidst change, opportunities arise as well. For example, Chris Skinner says in his interview that he is optimistic about how technology will facilitate a breakthrough in financial inclusion. In his words: "Today, you can serve everyone simultaneously, remotely and peer-to-peer, all at very low costs. I’d like to get a mobile phone in the hands of every human on Earth, so they can trade and transact with no barriers and no fees."
FMO’s NASIRA guarantee program, funded by the European Union and the Dutch government fund MASSIF, can already help (more traditional) banks take an additional step towards financial inclusion by serving groups that are usually perceived as too risky. Take Araratbank in Armenia. The bank provided Anna Kyaramyan, a Yerevan-based maquette and model maker, with an uncollateralized loan under the NASIRA guarantee to start a business of her own after she lost her job during COVID-19. Anna is just one of the many enterpreneurs who have been supported by Araratbank, which gave them uplifting insights: "The figures tell us that the behavior of clients without collateral is not much different from other clients," Vahan Gharibyan, Deputy Head of the Corporate Lending Department confirms in a three-part interview.
Michael Schlein, CEO of Accion, is a strong believer in the transformative power of tech in financial inclusion as well, but does warn of biases that lie beneath the automation and time-saving possibilities technology offers. "Take phone credit: timely top-ups are sometimes used as an indicator of financial stability. Men usually have their own phone and can control its use, while women often share their phone with the entire household. This can mean they could run out of credit more easily and more often, which could then work against them." FMO has provided financing to Accion's think tank to investigate the inherent biases in algorithmic lending to impoverished populations. According to Schlein, this research represents cutting-edge and groundbreaking work.
Let's move away from financial inclusion to climate risk: in Kenya, agricultural exports serve as a significant source of foreign exchange earnings. Due to the recent droughts, the country saw a decrease in exports leading to a reduction in the inflow of dollars into the country, which strains the economy's ability to finance imports and meet external obligations.
All of this, of course, does not go unnoticed by financial institutions and banks like I&M Group. Zipporah Gitau is the Group Risk & Compliance Officer of I&M Group, overseeing the subsidiaries across Eastern Africa. With the climate crisis raging across the world, factoring climate risk into I&M’s overall risk strategy has become a critical part of her job. ‘’So many types of risk go hand-in-hand when looking at climate issues,” Zipporah says. “Liquidity risk, FX risk, credit risk. If we don’t manage all these risks, if we don’t manage climate risk, it will lead to capital erosion. That’s why I like to say that climate risk is everyone’s responsibility.”
I hope the above topics have piqued your interest for our live event in Amsterdam on the 3rd and 4th of October. We are very much looking forward to offering you remarkable keynote speakers, in-depth workshops that directly touch your operations, and the chance to talk to peers, partners and investors that are all focused on the three topics that are on top of mind for all of us: People, Planet and Tech.
See you there!
Michael Jongeneel, CEO of FMO
