– Be prepared for future disruption: The Fourth Industrial Progress: A number of initiatives over recent years have Revolution is expected to disproportionately affect attempted to increase savings rates for Mexicans. women. Governments and employers should understand how workforces are expected to evolve, and identify jobs 2015: Possibility to make voluntary contributions at risk of technological disruption and any associated to existing Pension Fund Administrator accounts at opportunities for reskilling and adjacent careers. common retail outlets, including 7-Eleven stores, as well – Encourage financial inclusion and independence: as branches of a development bank and a state-owned Many women around the world rely on their husbands to telecommunications and financial services company handle the finances and provide retirement incomes. In 2016: Possibility to open a basic bank account through many developing countries, the problem is more acute a mobile phone payment platform with only a mobile as many women do not have access to the financial phone number, and to make deposits in a Pension system. Governments should ensure easy access to Fund Administrator account by sending an SMS (short banking and savings products, perhaps using advances messaging service). No fees are charged and no in technology (e.g. digital national IDs and mobile smartphone is required. banking), to reach under-served pockets of society, including women. Unique personal identification (ID): Digital IDs are an B. Leverage technology to increase levels of savings essential part of creating a financial inclusion ecosystem. Unique personal IDs enable individuals to more easily Digital transformation benefits manage their savings and financial accounts, avoiding fragmentation, as well as lost monies and accounts. Technology can play a key role in expanding access and Providers are better able to target benefits (e.g. subsidies encouraging participation in retirement savings tools. or credits) to the groups of society that need them the Research shows that individuals are seeking secure, easy- most. This element can be particularly important for informal to-use technology to help them manage their personal economies with many low-income workers, those moving 7 between the formal and informal sectors and those who finances. Older populations have the same desire for online tools, with 90% of adults under the age of 35 and 85% of all take time out from the workforce (e.g. individuals with adults reporting they want digital help. irregular work patterns and those taking time out to raise children or care for family members). In countries with well- Four billion mobile phones are in use globally. Using a established systems, introducing a unique identifier (e.g. a mobile phone to easily set up and contribute to savings national ID number or biometric ID) can support the mobility vehicles has benefited individuals in developing economies of savings accounts across employers and geographies. such as Kenya. There, a bank-by-phone system is very Allowing savings from various sources to be consolidated popular, such that currently the majority of previously significantly reduces the administration burden on both unbanked adults are able to save and transfer money using individuals and administrators to manage multiple savings their mobile phone. accounts. Spotlight on Biometric ID in India Spotlight on Mexico’s digital transformation to expand access A biometric ID has been introduced in India. For some individuals in the informal sector and those without jobs Issue: A large number of Mexican workers are not (e.g. female homemakers), this is their only form of ID. engaged in retirement savings. Due to high levels of The national ID is paired with a pension system to expand informal work, nearly 60% of the working population access to workers in the informal sector by automating is excluded from the mandatory pension system. It is the creation of pension accounts. estimated that the old-age poverty rate in Mexico is above 30% and that only 29% of the elderly population This digital framework overcomes many of the barriers (65 years and older) have a pension. For those who individuals face when trying to access a retirement do participate, replacement rates (retirement income savings system. Two of the system’s key benefits are that versus pre-retirement income) are very low due to low no paperwork is required and individuals do not need contribution rates and the time spent in the informal to visit a physical bank branch to set up an account. In workforce. Half of the formal workers in Mexico have not addition, contributions can be received from a variety of even thought about their retirement income.8 sources, including government incentives, micropayment plans and third parties. Opportunity: Mobile phone usage has been identified as being more effective to increase participation in retirement Secure financial ecosystems: To embrace technology savings than access to the internet or computers. In and innovation, safe digital financial systems must be 2013, 99.9% of Mexicans had a mobile device, while, in created, which protect and engage individuals. Systems 2015, fewer than 50% of households had access to a need to be safe and secure for individuals, protect computer or the internet. consumers’ privacy and be cost-effective and simple to implement. A regulatory oversight framework should be in place to address cyber-risk, ensure proper use of data and promote best practices. 10 How We Can Save (for) Our Future