Improve the policy environment to reap the benefits of digitalization in the finance sector, says ILO

A better framework would harness the full potential of technological innovation in the financial sector, which provides jobs for more than 50 million people, and help achieve decent work and sustainable enterprise development.

An adequate policy environment is needed to reap the benefits of digitalisation, concluded an ILO Technical meeting on the impact of digitalization in the finance sector  (24-28 January 2022) that brought together representatives from governments, employers and workers to discuss the decent work challenges and opportunities in the financial sector.

Such a framework would create a level playing field for businesses – both traditional banks and insurance companies – to provide decent and productive work in the sector, as well as for new and emerging tech companies, the meeting participants agreed.

The financial sector “makes a significant contribution to employment, and through financial inclusion, it fosters enterprise development, reducing the urban-rural divide, increases women’s economic participation and benefits SMEs,” said Juan Francisco Pozo, Government Group Vice-Chairperson.

Through digitalization, the financial sector can further boost innovation and entrepreneurship and support a just transition to a low-carbon economy. Furthermore, “The sector plays a key role across countries in promoting economic growth and pro-employment macroeconomic conditions. Digital finance also creates opportunities to develop better banking and financial products and services for consumers and creates new ways of channelling funding to businesses, thus improving financial inclusion,” said the Employers’ Group Vice-Chairperson, Giancarlo Ferrara.

At least 52 million people work in the sector; and in 2020 at least 4.6 million of these were young people, with young women accounting for 54.7 per cent. The financial sector also facilitates job creation in other sectors, through access to finance and entrepreneurship development, which benefits the whole of society.
Social dialogue can be a key tool to manage the impact of digitalization and facilitate the introduction of new technologies. Therefore, “innovative structures for social dialogue in the face of changes in work organisation and protocols for a just digital transition should be promoted,” added Rita Berlofa, the Workers’ Group Vice-Chairperson.

Measures are needed to ensure that remote working and other work arrangements effectively enhance productivity, facilitate job retention, promote decent work opportunities and foster inclusion.

“The accelerated use of digitalization in the sector [also] calls for a discussion on the regulatory environment and other measures to address any negative impact of digitalization on the financial sector workforce, including issues around workers’ privacy, cybersecurity and data protection,” said Abdulla Murad Al-Mullahi, Chairperson of the meeting.

The pandemic also highlighted the importance of frontline work and the importance of the sector for overall economic recovery and business continuity. At the same time it has accelerated the automation of work processes as well as the transformation of business models and the organisation of work. These developments have implications for skills development, working conditions and occupational safety and health, including with respect to psychosocial risks and work-life balance, including in the context of remote work.

The meeting highlighted the importance for governments and social partners of addressing these challenges and coordinating with education systems, training institutions and the private sector, to ensure that students and workers are equipped with the required digital and professional skills and competencies.

The meeting also adopted conclusions that will assist governments, workers and employers to harness the fullest potential of digitalization in the financial sector to achieve decent work, sustainable enterprise development and financial inclusion.

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