Abstract

The approach adopted in recent years by the ABI, together with the Observatory, is an important national and European innovation that highlights the possibilities for expanding and developing integrated, multistakeholder financial inclusion, combining all the key aspects: regulatory, business and social responsibility, as well as the various areas of competence. This is all supported by constant analysis that enables its effectiveness to be closely monitored.

The Experience

Financial inclusion is key in encouraging and accelerating the integration process and the participation of immigrants in all aspects of Italian life. Building positive relationships with financial intermediaries is essential to finding work, buying a home, starting a savings plan or even setting up a business. At a micro level, financial inclusion can help consolidate “economic citizenship” for newcomers who interrelate with and exchange goods and services with the bank; at the macro level, it can undoubtedly support the development of socio and economic trends of strong social impact.

The ABI range of activities for the financial inclusion of migrants includes a collaboration with the Home Office to set up a National Observatory for the Financial Inclusion of Migrants.

The Observatory, launched in 2011, was awarded by Home Office public tender to the Centre for International Political Studies (CeSPI).

The Observatory seeks to provide banks with clear background information to foster the development of banking services that will reconcile the requirements of competitiveness and efficiency with the development trends of immigration, a structural phenomenon in Italy.

In recent years, migrant banking in Italy, i.e. the range of commercial and other initiatives created by financial institutions for the provision of banking services to “new Italians”, has changed dramatically.

We can identify a first phase which could be defined as “passive”, in which all our of country’s economic and social system, including finance, looked at migration as a transient phenomenon, certain aspects of which grew sharply in the early years of the new millennium. That was immediately followed by a “proactive” phase which saw a proliferation of migrant banking and welcome banking initiatives spread throughout the banking sector. A third phase, which could be defined as consolidation, continued the process of financial inclusion and also saw the financial profile of this new customer segment gradually evolve to levels of sophistication similar to those of Italian customers. In our view we have now entered a new phase in the present time, in a rapidly changing environment where the new arrivals are seen alongside a migrant population with good levels of economic integration (multi-year migration experience, job stability, home possession, nuclear families and children, accumulation of personal wealth), in addition to the new generations. And finally there is an intermediate zone, represented by people who are becoming truly integrated and for whom financial inclusion is an important process accelerator and inclusion instrument. What this requires of the banks is increasingly skilled knowledge of local territories and the continuous monitoring of rapid changes in matters of migration; for this reason the activity of the Observatory certainly constitutes a strategic asset.

The Observatory in fact aims to provide data, indicators and comparable studies capable of dynamically showing ongoing trends, both nationally and by region. Against this background, the Observatory will offer opportunities for experimentation in local areas and interaction between the different stakeholders in the process, through an approach that aims to create space for analysis and dialogue and for the creation of a system space definable as pre-competitive, leading on to the next level where operators can compete in terms of business.

In particular, the group of experts, the Centre’s governance body (involving all the stakeholders concerned: ABI, Home Office, Ministry of Labour and Social Affairs, Ministry of Foreign Affairs and International Cooperation, Treasury and Ministry of Finance, Bank of Italy, the National Association of Insurance Companies, Italian Association of Consumer Credit and Real Estate, Poste Italiane, Crif-Credit Bureau and Unioncamere), constitutes a major innovation. This is a cross-institutional panel, able to perform a shared advocacy role supported by quantitative and qualitative analysis from the Observatory and which has greatly contributed to increasing the level and culture of financial inclusion and interaction between stakeholders through the proactive involvement of its members.

With regard to the banking world, the Observatory adopts a structured approach with two internal working groups that engage directly with the banks’ business areas most affected as regards financial inclusion and remittances. Corporate social responsibility leaders work alongside the working groups.
All this has value also at a higher level that sees companies and institutions committed to achieving sustainable development objectives on the Agenda 2030. Specifically, there are four Sustainable Development Goals (SDGs) that are directly relevant in this context: 1) defeating poverty; 9) innovation and infrastructure; 10) reducing inequalities (monitoring through specific indicators, social, economic and political inclusion of citizens, encouraging the adoption of policies for the promotion of greater equality) and 17) strengthening the means of implementation, renewing global partnerships for sustainable development.

More than 2.5 million current accounts in the names of citizens of 22 nationalities – an increase of 5% over the previous year (2015). The banking index, which measures the number of adult immigrants who hold a current account with a financial institution, has reached 73%. (Italy is the only country in Europe to have a banking index for immigrants)

Equally, migrants are demonstrating a growing ability to grasp the possibilities offered by financial products that allow a broad range of payment services: 745 thousand cardholders with IBANs not matched to a current account at the same bank. (Data relating to a 79% representative sample of the banking sector in terms of total assets, plus post office accounts).

There has also been a 10.5% increase in migrant-owned micro enterprises in the banks’ small business sector: in 2015 over 122 thousand companies were managed by immigrant entrepreneurs. Female enterprises represent 31.7% of the migrant-owned small business portfolio and have accounted for above-average growth rates in the past 4 years.

The approach adopted in recent years by the ABI, together with the Observatory represents an important national and European innovation that highlights the possibilities for expanding and developing integrated, multistakeholder financial inclusion, combining all the key aspects: regulatory, business and social responsibility, as well as the various competences. This is all supported by constant analysis that enables its effectiveness to be closely monitored. An innovative approach that also demonstrates its potential for expanding financial inclusion goals on a universal plane.