ABI presentation 28 May Commission Conf on financial Inclusion _Bozza by fanzhongqing


									             “CSR and financial inclusion”

       Giuseppe Zadra – Direttore Generale

“Financial inclusion: improving access to basic financial services”

                      European Commission

                       Brussels, 28 May 2008
                  ABI and Corporate Social Responsibility (“CSR”)

Corporate Social Responsibility is not an additional activity, it is about the core
business of a bank and, generally, of a company.

                  The Italian banks and ABI: what we are doing on CSR
              •    to contribute to a better understanding of the common interests
                   between member banks and their stakeholders;

              •    to raise awareness on the opportunity of investing in long-term
                   sustainability business strategies;

              •    to represent the Italian banking system’s activities on CSR to the
                   major stakeholders;

              •    to promote a voluntary approach on CSR based on innovation,
                   continuous improvement and sharing of best practices.

                         The European context for CSR

The domestic scenario in which Italian banks operate today features novel needs and
demands. There are now new customers turning to banks: temporary workers, the
not-for-profit sectors, low-income families, micro-enterprises operating in
disadvantaged areas of the country, immigrants, etc.

Our main goal to pursue financial inclusion, to promote the tools and development
opportunities for innovative operating methods in product offering

       ABI and EU initiatives on Financial inclusion

          Contribution to
                                                    Fostering innovation and
        the EU Alliance on
                                                    entrepreneurship in
        CSR (promoted by
                                                    sustainable products and
           the European
                                                    services which address
          Commission in
                                                    societal needs
           March 2006)

                          Financial Inclusion Laboratory:
                  preliminary findings of the conducted research

 Banks and financial inclusion: survey on the Italian territory, ABI’study
                             (II edition 2007)

Microfinance services are offered by
a number of banks that account for
70% of total assets, and by                         Microfinance services offered
approximately 73% of branches.
                                                              by banks
At the end of 2006, the impact of                                                     19.8%
microfinance on the total services
income was 3% in 95% of cases. In      49.1%
some cases, it reached 5%. There
are a lot of products and services
                                                                                               Current accounts
that can rely on the microfinance                                                              and payment
label.    Among the most offered,                                                        31%
current accounts and payment
services   (49.1%),   followed   by
financing    (31%)   and    savings
services (19.8%).                          Source: ABI Research centre and CSR Unit

                             Financial Inclusion Laboratory:
                    preliminary findings of the conducted research

     The financial services for immigrants: an offer study, ABI – CeSPI’s
                            study (II edition 2007)

In Italy there are 2,9 million
immigrants. Almost 1,5 million of           100
them are financially fully integrated.       80   67,4
Only 2 years ago they numbered 1                                            62,8
                                                                                          57,7 55,7          59,3
million, approximately 1/3 less.             60          48,2 47,4                 49,5               49,3

Immigrants who hold a current
account with banks went from                 20
1,058,000 to 1,410,000 in 2 years,
which means an increase of 352,000            0
units, in other words from 60% to
67% of the total amount of people
coming from non-OCSE countries.
                                         Percentage of banked immigrants: breakdown of sample by nationality

                       Financial Inclusion Laboratory:
              preliminary findings of the conducted research

        The financial needs of immigrants: a demand side study
                        ABI – CeSPI’s new study.
                                  Saving accumulation /

The survey                      Insurance products

revealed that                   Safe-deposit boxes
banked                              Money transfers
immigrants are
typically and                    Saving passbooks

predominantly                            Credit cards

mass-market                     Prepaid debit cards
clients who use      Automatic debit / credit to account

basic financial
services.                                 Cashpoints

                                 Personal cheques

                                      Home banking

                                    Current account

                                     % of tot finance
                                                           0   10   20   30   40   50   60    70    80    90       100

                                           Percentage of use of certain banking services by immigrant clients of banks

Over 8 million individuals are faced with financial exclusion in Italy
today. These people face difficulties with, for example, banking services
and banking products which means they cannot lead a normal social
As of 2003, the Italian Banking Association has pursued a distinct
strategy for improving transparency, comparability and for helping
clients in making educated choices. These tasks are realized through
“PattiChiari Consortium”.

        In 2004, PattiChiari launched a simple, accessible product, the
        Basic Banking Services, designed for financial inclusion. Its
        special feature is that it makes available a package of essential
        instruments and services at very low cost;

        PattiChiari and the Italian Banking Association also carried
        out financial education projects in order to help individuals better
        understand financial products and make informed choices;

        In 2007, the Italian Banking Association signed a Point-to-
        Point Protocol with the Home Office in order to offer Basic
        Banking Service to clients with a bad credit history
        (defaulted customers).

                               Basic Banking Services

                       What are the benefits for customers?
The Basic Banking Service lets clients:
•   access money in a completely safe way, and avoid carrying cash or keeping it at home
•   save time and simplify life (for example by using direct debit to pay utility bills)
•   use a simple service devised for people that do not have a current account
•   reduce current account costs: only a few euros per month

The “Basic Banking Service” may also be offered by participating banks in the form of
a special prepaid cash card through which you can use all of the services described
in this guide.

What is not included?

The Basic Banking Service is not a real current account, but a simplified account.
 Specifically, it does not include:

•   a chequebook
•   a credit card
•   various forms of finance (overdraft, loans, mortgages, etc.)
•   the purchase of securities such as Italian Treasury Bonds (BOT), bonds, shares, etc.

                                                                           Basic Banking Services

                          Breakdown of products by cost in April 2008
                                                                                                         76 banks delivering basic bank accounts
                                  (excluding stamp duty)
                                                                                                         more than 22,000 branches
                                                                  Products costing less than a Post
                                                                  Office account                         3.8 million guides delivered to customers

                                                                                                         around 55,000 contracts signed
                                  (56 products)                                                          26% of basic banking service accounts
                                                                                                          offer   an   unlimited  number     of
                         50%                        47%
                                                                             Average monthly
                                                                               cost of Basic
                         40%                                                                             63% of products offer 60 or more
                                                                             Banking Service
                                                                                                          transactions per annum included in the
                                                                                  2.80 €
Percentage of products

                                                                                                         73% of products have a monthly cost
                                                                                                          lower than a Post Office account
                                                                11%         11%                          23% of those opening basic banking service
                                                                                                          accounts are aged between 18 and 30
                         10%                                                       4%                     (younger first-time account holders); this is
                                                                                                          in comparison to the 15% of teenagers with
                                                                                                          a current account
                               <1€      1-2€       2 - 3.4 €   3.4 - 4 €   4-5€   5-6€   >6€
                                                                                                         15% of these are non-Italian citizens
                               Monthly cost of basic banking service (ex. stamp duty)

                      Financial inclusion: a common challenge

    The goals of financial inclusion require more far-reaching policies not limited to
    the confines of bank operations.

    Banks, as undertakings, operate in a business environment and must pay strict
    attention to the cost-effectiveness of their management activities.

    A development of society that would be beneficial for all the parties concerned,
    implemented by a variety of different stakeholders, where everybody does their
    share of the work: banks and also institutions, governments, international
    organizations, and those representing, or who are close to, the new customer

Financial inclusion              Social inclusion


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