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Assessing financial inclusion in Portugal from the central bank’s perspective
João Cadete de Matos
Director ● Statistics Department
International Statistical Institute Regional Statistics Conference
Bali, Indonesia | 22 – 24 March 2017
2 • Assessing financial inclusion in Portugal from the central bank’s perspectiveMarch 2017
Contents
1. Motivation
2. The evolution of the provision of financial services inPortugal
3. The role of the Banco de Portugal as a provider offinancial services
4. Measuring financial inclusion in Portugal
5. Conclusions
Assessing financial inclusion in Portugal from the central bank’s perspective
Contents
3 • March 2017
Motivation
• There are still more than two billion adults that do not have access to formalfinancial services (ATISG*, 2010)
Assessing financial inclusion in Portugal from the central bank’s perspective
1. Motivation
Assessing financial inclusion in Portugal from the central bank’s perspective
Financial inclusion – the ability of individuals or enterprises to obtain formal financial services appropriate to their needs
Major challenge for central banks and policy
makers worldwide
*ATISG: Access through Innovation Sub-Group of the G-20 Financial Inclusion Experts Group
4 • March 2017
How can the Banco de Portugal help policy-makers in addressing this challenge?
• The Banco de Portugal publishes statistics on:
Assessing financial inclusion in Portugal from the central bank’s perspective
Assessing financial inclusion in Portugal from the central bank’s perspective
1. Motivation
5 • March 2017
How can the Banco de Portugal help policy-makers in addressing this challenge?
• The Banco de Portugal publishes statistics on:
Assessing financial inclusion in Portugal from the central bank’s perspective
These data can be used to monitor the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
1. Motivation
6 • March 2017
The evolution of the provision of financial services in Portugal
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2011 2012 2013 2014 2015
ATM demographic coverage(Number of ATMs per million inhabitants)
European Union Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
7 • March 2017
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
ATM demographic coverage in 2015(Number of ATMs per million inhabitants)
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
8 • March 2017
And why is that? … The role of MULTIBANCO
• A sophisticated network shared by every bank operating in the economy that fullyintegrates ATMs and EFTPOS
• In addition to cash operations, it offers a wide range of more than 60 differentservices (e.g., money transfers, payments for utilities bills, payments to the State andthe Social Security, mobile phone top-ups, transport ticketing, event booking andticketing, …)
Assessing financial inclusion in Portugal from the central bank’s perspective
“Portugal’s ATMs are among the most high functional of Western Europe. A wide range of unusual facilities are also available (…). ATMs are also advanced in terms of hardware features.”
RETAIL BANKING RESEARCH BULLETIN
“Portugal’s MULTIBANCO system is acknowledged to be one of the most sophisticated and comprehensive in the world.“
EUROBUSINESS
“... the example of the Portuguese system, SIBS, suggests that greater innovation may arise out ofa system where all the processing for a number of payment methods is carried out centrally.”
THE OFFICE OF FAIR TRADING
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
9 • March 2017
0
5.000
10.000
15.000
20.000
25.000
30.000
2011 2012 2013 2014 2015
POS demographic coverage(thousands per million inhabitants)
European Union Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
10 • March 2017
0
50
100
150
200
250
300
Luxe
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Mal
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Cyp
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Au
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Esto
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Ger
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Latv
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Hu
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Cro
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Fran
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Slo
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Spai
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Un
ited
Kin
gdo
m
Bu
lgar
ia
Gre
ece
Ro
man
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Number of institutions offering payment servicesper million inhabitant in 2015
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
11 • March 2017
0
100
200
300
400
500
600
700
800
2012 2013 2014 2015
Number of offices of institutions offering payment services per million inhabitants
Euro area Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
12 • March 2017
0
200
400
600
800
1.000
1.200
1.400
Po
lan
d
Cyp
rus
Lith
uan
ia
Bel
giu
m
Ital
y
Spai
n
Po
rtu
gal
Luxe
mb
ou
rg
Bu
lgar
ia
Hu
nga
ry
Slo
vaki
a
Fran
ce
Au
stri
a
Euro
are
a to
tal
Cze
ch R
epu
blic
Latv
ia
Ger
man
y
Mal
ta
Slo
ven
ia
Cro
atia
Esto
nia
Ro
man
ia
Irel
and
Gre
ece
Fin
lan
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Den
mar
k
Swed
en
Net
her
lan
ds
Number of offices of institutions offering payment servicesper million inhabitant in 2015
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
13 • March 2017
50%
62%68% 70%
5%
9%
11%14%
12%
12%
14%
12%
33%
17%
7%4%0% 0% 0% 0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2005 2010 2015
Transactions per type of payment service: Portugal 2000-2015
Card payments Credit transfers Direct debits Cheques Others
Assessing financial inclusion in Portugal from the central bank’s perspective
The evolution of the provision of financial services in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
2. The evolution of the provision of financial services in Portugal
14 • March 2017
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
Assessing financial inclusion in Portugal from the central bank’s perspective
The role of the Banco de Portugal as a provider offinancial services
Banking conduct supervision
• Advertising
• Complaints
Bank Costumer Portalclientebancario.bportugal.pt
15 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
The role of the Banco de Portugal as a provider offinancial services
The Central Credit Register (CCR)• Database managed by Banco de Portugal. Registers information supplied by
reporting institutions (institutions that grant loans) concerning the creditliabilities of their clients (individuals and organizations)
• Main purpose: To support credit institutions when evaluating the risk of grantingcredit to the economic agents, allowing them to obtain information on theaggregated indebtedness of their clients or any individual or organization askingfor a loan.
• Data reported include, inter alia: Loans outstanding granted to households andcorporations by type and purpose; potential loans and securitised loans; typeand value of collateral or guarantee; original and residual maturity; creditdefaults and the number of days the loan is past due; country where the loanwas granted
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
16 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
The Portuguese Central Credit Register – some figures
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
17 • March 2017
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
Central Credit Register coverage rate(as % of adult population)
Portugal has been leading this ranking
for a long time
The Portuguese Central Credit Register – Some figures
Source: World Bank, Doing Business 2016
Assessing financial inclusion in Portugal from the central bank’s perspective
18 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
The Portuguese CCR – The way forward
2005Bilateral exchange ofcredit data with otherEU CCR (MoU)
2018
New system (on a loan-by-loan basis; AnaCredit)
1978Beginning of CCR (ona debtor-by-debtorbasis)
.
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
19 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
The Portuguese CCR – The way forward
Transmission of information on loans – New CCR (2018)
Statistics Department (new CCR)
Financial Stability Department
Banking Conduct Supervision Department
Banking Prudential Supervision Department
Markets and Reserve Management Department
Credit Institutions
Integrated Management of InformationAnaCredit
Including MIR on loans
CCR (2016)
24 variables
New CCR (2018)
179 variablesPrevious +51, AnaCredit +62, other +42
Assessing financial inclusion in Portugal from the central bank’s perspective
3. The role of the Banco de Portugal as a provider of financial services
20 • March 2017
Assessing financial inclusion in Portugal from the central bank’s perspective
4. Measuring financial inclusion in Portugal
Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal
• To acquire information on the financial attitudes, behaviours and on thelevels of understanding of financial matters by the population, Banco dePortugal conducted a survey on the financial literacy of the Portuguesepopulation
21 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
11% of the Portuguese population did not have a bank account in 2010
Assessing financial inclusion in Portugal from the central bank’s perspective
4. Measuring financial inclusion in Portugal
22 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
The main reason for not having a bank account was not having enough income to justify it
23 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
• For the individuals who have a bank account...
24 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey• For the individuals who have a bank account...
25 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
• For the individuals who have a bank account...
26 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
• Minimum banking services: An initiative taken by Banco de Portugal topromote financial inclusion
27 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Measuring financial inclusion in Portugal – Results of the survey
• Minimum banking services accounts have more than tripled since 2013!
9.646
13.884
24.068
34.953
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
2013 2014 2015 2016
Evolution of the number of minimum banking services accounts
+44%
+73%
+45%
28 • March 2017 Assessing financial inclusion in Portugal from the central bank’s perspective
Conclusions
• Payment statistics are increasingly more relevant in evaluating the degreeof financial inclusion of an economy and, thus, critical for policymakers andcentral banks
• The development of comprehensive central credit registers, such as thePortuguese CCR, are key to foster financial inclusion, by supporting creditinstitutions in the assessment of credit risk
• Central banks also play an important role as conduct supervisors, byadvertising best practices and managing complaints that encourage creditinstitutions to promote financially inclusive actions
• Despite that the current results are encouraging, the challenges aheaddemand that policymakers and central banks keep financial inclusion highin the agenda
Assessing financial inclusion in Portugal from the central bank’s perspective
5. Conclusions