Guidance on the application of the Core principles for effective banking supervision to the regulation and supervision of institutions relevant to financial inclusion . Financial innovation and financial inclusion can introduce potential benefits to the safety, soundness, and integrity of the financial system as well as potential risks to providers and customers alike and the transfer of well-known risks to new players. This Guidance examines the risks presented by banks and nonbank financial institutions in their endeavor to reach the unserved and underserved customers and, using the lens of the Core Principles, guides prudential supervisors on the application of a proportionate regulatory and supervisory approach. In addition, the Guidance addresses issues related to consumer protection and to anti-money laundering and combating the financing of terrorism (AML/CFT). The Guidance specific to nonbank financial institutions – which in many countries are the primary providers of financial services to unserved and underserved customers  – is provided to reinforce the importance of the proportionate regulation and supervision of such institutions.