Digital Financial Services
Digital financial services (DFS) can expand the delivery of basic financial services to the poor through innovative technologies like mobile-phone-enabled solutions, electronic money models and digital payment platforms. Digital channels can drastically drive down costs for customers and service providers, opening the door to remote and underserved populations. Financial regulators around the world have realized the tremendous role DFS can play for financial inclusion and seek to unlock this potential by creating enabling environments for digital financial services.
In doing so, regulators seek to learn from policy and regulatory approaches that have been successfully tested and implemented in other countries. The AFI Digital Financial Services Working Group (DFSWG) actively supports these peer-to-peer learning efforts and provides an ideal platform for exchanging knowledge and experiences among regulators.
While developing enabling environments for DFS, regulators face key policy and regulatory questions such as:
· How to balance openness and innovation with sufficient certainty about the soundness of the regulatory framework?
· How to regulate and safeguard the issuance of new digital payment instruments like e-money?
· What are the main AML/CFT concerns in relation to digital financial services?
· What are the key regulatory issues regarding sound mobile-enabled cross-border payments?
· What are the key principles in the supervision and oversight of digital financial services?
· How to foster interoperability and effective interconnection within different digital financial services models?
· What are the main implications for regulators with regards to establishing successful agent networks for bank and non-bank mobile financial services providers?
· How to balance financial stability with financial inclusion goals while developing enabling regulatory frameworks?
· Who are the key stakeholders that need to coordinate with financial regulators in order to put in place regulations that are prudential and enabling enough?