ECB’s Knot: Need Right Balance Between Financial Inclusion and Innovation

12 March 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot on Tuesday said that financial inclusion was especially relevant when responding to digital innovation, and that both needed to be well matched.   

In a speech at the BIS High Level Roundtable on Financial Inclusion in Basel, Switzerland, a text of which was posted to website of the De Nederlandsche Bank, which he heads, Knot said that ‘we must make sure that we strike the right balance between promoting digital innovation and ensuring equitable access [to financial services].’

At the same time that open finance could be positive for financial inclusion, it could also be challenging for citizens who were not digitally native, he said, noting that around 13 million people in Europe experienced some type of financial exclusion.

‘Our main message is policymakers should prioritise actions that enable trusted, innovation-enabling and equitable data access’, he said.

Data ethic frameworks that clearly explained the use of data were key to this process, he said.

‘To sum up, open finance frameworks offer tangible opportunities for people who have difficulty in accessing financial services, but we need to calibrate them carefully to make sure that open finance will be a force for good’, he said.