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A virtual conference was held this week to launch a financial inclusion report produced in partnership with Amazon Web Services (AWS) and the Official Monetary and Financial Institutions Forum (OMFIF). The conference outlined how cloud computing is at the heart of the digital transformation in the global finance services industry.

The European Banking Authority defines cloud computing as a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources that can be rapidly provisioned and released with minimal management effort or service provider interaction.

The report states that cloud computing is key to financial inclusion and the direct enabler for countries within the Asia-Pacific region to work towards attaining the United Nations 2030 sustainable development goals.

Along with the introduction of financial technology and democratisation of financial services, financial inclusion helps reduce costs for citizens and fosters the development of innovative services, the report said.

Cloud-based services can enhance financial inclusion and the accessibility of digital financial products. As regulatory institutions and central banks attain a better understanding of cloud platforms, and implement appropriate safeguards, the benefits of the cloud to financial inclusion will only increase.

The report also noted the acceleration of digital financial services amid the pandemic and how they have been, and will continue to be, vital to ensuring financial inclusion in the new normal.

In the Asia-Pacific region, policymakers are becoming increasingly switched on to the benefits of cloud technology. This may have a profound and positive impact on the development of innovative solutions for financial inclusion.

Highly sophisticated financial systems have been developed. But financial infrastructure has often failed to pick up poorer sections of society or smaller businesses. Financial inclusion has become a key issue for politicians, banks, payment providers and policy-makers in Asia, it said.

In an OMFIF survey of the central banks and financial regulators analysed in detail in this report, 73 percent of respondents identified financial inclusion as an explicit target or objective for their institution, the report said.

According to the same policymakers, 90 percent of respondents believe that digital payments will be the core competency required in extending basic financial inclusion. Providing the under-banked with financial services is therefore intertwined with policies related to digital infrastructure reliability and conducive fintech ecosystems.

However, there are risks involved with cloud implementation. CGAP, a global partnership of more than 30 leading development organisations, said that cloud investment offers a good incentive for financial inclusion, but balance is key.

As with any kind of outsourcing, compliance risks are present because the financial institution loses some control over and visibility into risk management. There is also fear that the cloud might reduce a financial supervisors ability to access data or inspect the cloud providers facilities. Furthermore, there are concerns that personal data could be accessed by [the] governments of the countries where the cloud provider is based.

Cybersecurity, cloud and AWS expert Laurent Mathieu says: Cambodia has solid drivers for accelerating adoption, but other factors could hinder its pace. [The] government plays an important role and the pace of adoption will depend on future policy framework developments and whether cloud computing will be fostered as an enabler in the digital transformation roadmap, he said.

Mathieu says that although factors might be obstacles for a rapid surge in cloud adoption, things can change very quickly, particularly in an emerging economy with a track record of rapid development.

Cambodia has ambitious plans to transition to a digital economy and the government is giving the impulse by actively modernising the policy framework. Enhancing internet connectivity with new submarine cables, extended country-wide coverage and high-speed 5G access are high on the agenda, even during the pandemic. Beyond network connectivity, Cambodias businesses will still need a platform onto which the new digital capabilities can be built.

Cambodias startup community is growing fast, with new products launched every month, in particular in the areas of food delivery, ride services, online grocery and ecommerce. Demand is growing and the pandemic has accelerated this trend even further. Fintech, agritech and edutech are among the areas gaining momentum.

Without the burden of legacy, startups rely heavily on cloud services to build their value proposition. Often considered as a driving force of the technology industry, startups are the early adopters, paving the way to broaden cloud adoption in the country, he added.

April 28, 2020

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The sky's the limit: Cloud computing offers financial inclusion new reach - Khmer Times