Central Bank of the Future project concludes with insights on technology, calls for further research

July 21, 2021

“The role of the central bank is undoubtedly evolving….The time is ripe for innovations that will advance financial inclusion” So concludes the final research paper of the two-year Central Bank of the Future research project, conducted by the Ford School’s Center on Finance, Law & Policy.

The project, which was led by Dean Michael S. Barr and Professor of Practice Adrienne Harris, with support from the Bill and Melinda Gates Foundation, convened current and former central bank governors, policymakers, regulators, researchers, innovators, entrepreneurs, consumer and community organization leaders, directors of non-profit think tanks, and others, to explore how central banks could leverage technological advances to foster financial inclusion. 

The final paper summarizes many of the key themes that emerged throughout the project, including, a comprehensive survey of how stimulus payments were delivered using digital technologies that reached under- and unbanked populations; the role of central banks as utilities and service providers rather than just regulators; establishing global definitions of financial inclusion; the use of artificial intelligence, digital currencies and distributed ledger technologies; and the ways in which new technology players and fintech companies can work with incumbent financial institutions—especially in emerging markets—to be able to perform identity verification to global standards. 

The final paper also makes nine recommendations for future research. “Research initiatives should encourage a multidisciplinary approach to financial inclusion and innovation. In particular, leveraging new technologies such as AI and DLT, along with more traditional areas of central banking expertise, will provide the best chance of innovative strategies to advance financial inclusion globally,” the authors state.

“Financial inclusion ought to be a core mandate for central banks, and I’m excited to see the ongoing work that will emerge from this two-year project with the Gates Foundation,” said Barr. “I want to particularly thank Adrienne Harris for her great leadership on this project, and the stalwart support of Christie Baer and our team of research assistants.”

The project produced an introductory paper, eight working papers, a comprehensive data set cataloging central bank financial inclusion mandates from around the world, and a “What If” blog series. Two conferences—in 2019 and 2020—convened experts from around the world to share ideas, case studies, best practices, and innovations regarding  financial inclusion.

“Fintech firms, big tech, NGOs, and banks are now engaged in financial inclusion efforts. It is crucial that a culture of collaboration is fostered worldwide that encourages central bank innovation alongside private actor input and encourages feedback from consumers themselves,” it concludes. 

The final paper was co-authored by three of the Center on Finance, Law & Policy’s student research assistants: Bryan Ricketts (MPP/MBA ‘23), Megan Kelly (Law ‘21) and Emma Macfarlane (Law ‘21).