Michelle W Bowman: Advancing cross-border payments and financial inclusion

Speech by Ms Michelle W Bowman, Member of the Board of Governors of the Federal Reserve System, at the 19th BCBS-FSI High-Level Meeting for Africa, Cape Town, South Africa, 15 February 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
16 February 2024


Thank you to the Financial Stability Institute of the Bank for International Settlements and especially to its Chair, Fernando Restoy for the invitation to speak about these important topics. I'd also like to thank the South African Reserve Bank for hosting this gathering. It is a pleasure to join you in Cape Town, and I am delighted to speak with you about advancing cross-border payments and financial inclusion. I find great value in engaging with and learning from our international colleagues on these international and domestic issues.

We are all participants in a global and interconnected financial ecosystem, and payments are a vital component of this system. The payments landscape continues to evolve, through infrastructure upgrades, innovation, changing consumer preferences, and advancements in both the public and private sectors. Faster, cheaper, more transparent, and more inclusive cross-border payment services offer widespread benefits for citizens and economies around the world, with the potential to support economic growth, international trade, global development, and financial inclusion.

This global ecosystem is comprised of individual jurisdictions, each with its own history, public policy objectives, payment infrastructures, and regulatory environments. Within these independent economies exist a wide range of businesses and consumers, all with vastly different needs and requirements. As policymakers, we must consider not only how to foster safe, efficient, and accessible payment and settlement infrastructures to support the broader financial system but also how those same systems and infrastructures can support the needs of consumers, businesses, and financial service providers. This includes support for responsible innovation and enabling providers, such as banks and other nonbank financial service providers, to meet the evolving needs of their customers.

In many cases, the policy tradeoffs we face domestically are amplified in the cross-border context. To foster safety and efficiency in the payment system, it is imperative to seek improvements that support an accessible and inclusive system that works for the broad spectrum of different participants, while still maintaining rigorous risk, fraud prevention, and compliance standards that are critical for protecting participants and the overall system. It is also important to note that these issues are complex and will not be resolved through advances in technology alone. Rather, changes in technology must align with the evolution in individual behavior and market conventions, and when this does occur, it does so only over time.