Improving the policy environment to leverage the benefits of digitalization in the financial sector, says ILO

GENEVA (ILO News) – An adequate policy environment is needed to reap the benefits of digitalization, concluded an ILO technical meeting on the impact of digitalization in the financial sector (24-28 January 2022) which brought together government, employer and worker representatives to discuss decent work challenges and opportunities in the financial sector.

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

The financial sector “makes a significant contribution to employment and, through financial inclusion, it promotes business development, reduces the urban-rural divide, increases women’s economic participation and benefits SMEs”, said Juan Francisco Pozo, vice-president of the government group.

Through digitalisation, the financial sector can further stimulate innovation and entrepreneurship and support a just transition to a low-carbon economy. Furthermore, “the sector plays a key role in all countries in promoting economic growth and employment-friendly macroeconomic conditions. Digital finance also creates opportunities to develop better banking and financial products and services for consumers and creates new ways to channel finance to businesses, thereby improving financial inclusion,” said the Group Vice President of employers, Giancarlo Ferrara.

At least 52 million people work in the sector; and in 2020, at least 4.6 million of them were young people, with young women accounting for 54.7%. The financial sector also facilitates job creation in other sectors, through access to finance and the development of entrepreneurship, which benefits society as a whole.

Social dialogue can be a key tool to manage the impact of digitalization and facilitate the introduction of new technologies. Therefore, “innovative structures of social dialogue in the face of changes in the organization of work and protocols for a just digital transition must be promoted”, added Rita Berlofa, vice-president of the Workers’ group.

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

“The accelerated use of digitization 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 relating to worker privacy, cybersecurity and data protection,” said Abdulla Murad Al-Mullahi, chairman of the meeting.

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

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

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

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