Senior regulators and supervisors from 17 central banks and other regulatory authorities will meet over three days to deliberate the key challenges and opportunities posed by innovative new financial services on offer by mobile network operators (MNO) in South Africa and around the world. Sending money to relatives or paying bills using a mobile phone is as easy and affordable as sending a text message in some countries. Some MNOs have even partnered with commercial banks to offer clients basic banking services such as deposits and withdrawals via their mobile network platform.
“Recent developments in mobile-phone enabled financial services suggest that we are on the cusp of a revolution in the way we deliver financial services” said Doubell Chamberlain, Managing Director of Cenfri, a leading think tank working in financial inclusion regulation. “Any individual with access to a mobile phone – no matter how poor or how far away from a bank they may be – will soon have a safe place to store their money.” He predicted.
The widespread penetration of mobile phones across Africa and other regions that have been traditionally underserved by the commercial banking sector offers a new channel for closing the access to finance gap. In South Africa about 60% of the population has access to formal financial services, but in sub-Saharan Africa this figure is only about 20%. Mobile phones could be a vehicle through which hundreds of millions of unbanked households in Africa, Asia and Latin America access secure and affordable financial services – which is known to have a positive impact on income and poverty levels.
The 40 delegates at this week’s meeting co-hosted by Cenfri and AFI have a clear challenge – to enable innovation and experimentation in mobile money; but to ensure it does not interfere with the safety and soundness of the national financial system, does not bring undue risk to operators or customers, and adheres to international standards namely on anti-money laundering and counter financing for terrorism.
Mobile money is new territory for mobile phone operators, commercial banks and regulatory authorities – therefore it is not surprising that there are more questions than answers.
“The best way for regulators to find the answers they need is to turn to one another and learn from experiences in other countries” said Alfred Hannig, Executive Director of AFI, a membership association of central banks from developing countries. “Developing country policymakers are at the forefront of some of the most successful and innovative solutions – we can all benefit from their knowledge and experience.”
The meeting is designed to unlock this knowledge. Delegates from 12 African central banks, along with their peers from Ecuador, Mexico and Russia will hear first hand from countries that have forged early paths with mobile money regulation. The Central Bank of Kenya will share their treatment of the phenomenally popular M-Pesa mobile phone payment system which now has 10 million subscribers. Bangko Sentral ng Pilipinas will reflect back on their decade-long journey with e-money regulation and the advent of both bank-led and MNO-led services now used by 6 million Filipinos. Finally the State Bank of Pakistan will share lessons learned with forging partnerships between MNOs and commercial banks to offer mobile-based banking services.
The three-day workshop is only the start of a global knowledge-sharing network for regulators on mobile phone financial services. Delegates will help design a long-term working group on the subject to be comprised of central bank and other regulatory authorities from AFI’s membership base.
Press contacts:
Alyson Slater, Alliance for Financial Inclusion
alyson.slater@afi-global.org +66 2401 9370