DFS innovations can rapidly expand financial access and inclusion, but also pose risks related to fraud, market abuses, and financial stability. Regulatory frameworks thus need to strike a balance between fostering innovation, protecting consumers, and addressing the potential for unintended consequences of technological disruption. They must also ensure the market is a level-playing field for all service providers to participate in the sector.
With a vibrant DFS market and a progressive central bank, Bangladesh has much to share with the rest of the world. This case study delves into the evidence-based benefits and limitations of Bangladesh Bank’s approach to regulating and supervising innovations in the DFS market.