Non-traditional or legacy financial institutions, services and products differentiated by technology are rapidly becoming mainstream, thereby, creating digital financial services (DFS). DFS, therefore, are a broad range of financial services accessed and delivered through digital channels, including payments, credit, savings, remittances and insurance. The digital financial services (DFS) concept includes mobile financial services (MFS) – The use of a mobile phone to access financial services and execute financial transactions. This includes both transactional services, such as transferring funds to make a mobile payment, and non-transactional services, such as viewing financial information.
DFS are typically distributed using “digital channels” which in the context of this document refers to the internet, mobile phones (both smartphones and feature phones), ATMs, POS terminals, Kiosks, NFC-enabled devices, chips-based cards, biometric devices, tablets, phablets and any other digital system or instrument. DFS business models usually employ agents and the networks of other third-party intermediaries to improve accessibility and lower the overall service delivery cost. These services are changing business models, distribution channels and consumer engagement approach, thereby, democratizing the access, usage and quality of financial services such as payments, savings, credit, investments, etc… across the globe. Now, commonplace DFS models such as mobile money, branchless banking and other digital payment mechanisms have been critical in providing safe, convenient and cheaper payments and financial services to the market including previously financially excluded populations.
The use and promotion of digital financial services (DFS) to advance financial inclusion seems a natural marriage as technology act as a perfect enabler of the elements identified to foster inclusion of the unbanked and achieve financial inclusion as indicated in the Global Findex data9 where countries like India and Guatemala recorded considerable positive outcomes from the implementation of digital biometric ID and rules around AML to simplify KYC respectively. DFS, through the diverse digital channels and models, can offer personalized services and offerings to the market, reducing if not removing the barriers associated to access, usage and quality of financial service compared with the formal traditional financial systems.
Digital Financial Services (DFS) has been a cornerstone of AFI’s work since its inception. This continues to be a key focus area for AFI members, as use-cases evolve with new and emerging technologies and the overlap with other core mandates of regulatory and policy making objectives of market conduct, consumer protection, financial inclusion data and strategies, not forgetting SME finance. Furthermore, the rapid technological advances of DFS have increased the scope of work in this space significantly. The proliferation of digital identity systems, data driven financial products/services, crypto-currencies, blockchain applications, new ways for governments to augment the supervision of the financial industry and for the industry to automate compliance, all have immense potential for the member-base of AFI, hence, creating new opportunities for AFI to provide policy leadership, facilitate peer-learning and knowledge exchange, guidance and implementation support and extensive advocacy. AFI therefore, with the partnership with its members actively work towards improving the financial inclusion index globally with concrete commitments from members registered through their respective Maya commitments and increasing support for in-country implementation and measurable policy changes.
DFS has been a cornerstone of AFI’s work since its inception. AFI and its members are actively working towards improving financial inclusion globally through their Maya Declaration commitments and increasing support for in-country implementation and measurable policy changes.
Fundamental and emerging topics under DFS are explored in-depth through AFI’s Digital Financial Services Working Group (DFSWG).
“Digital financial services contributed to increasing financial inclusion of women, but in some countries, it has been disproportional. Even though access to finance for women is rising, the gender gap is still persistent” (Dr. Alfred Hannig, Executive Director, AFI).
The key to success in financially empowering women is through gathering data, analyzing insight and continuously crafting effective strategies to engage and include women.
Reflects the network’s financial inclusion intervention priorities, DFS targets make up a significant share of Maya Declaration commitments with at least one appearing in every 50 commitments. DFS is among the top three working groups — alongside CEMC and FID — in terms of a continued uptick in commitments that address the usage and quality of financial inclusion.
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 Digital financial services - National payment system
- Agent banking
- Mobile financial services
- E-Money
| Maya Declaration targets | 38 | 52 | 68 | 72 | 89 | 95 | 111 | 160 | 165 |
| Completed | 21 | 27 | 37 | 38 | 43 | 47 | 48 | 60 | 65 |
| In progress | 17 | 25 | 30 | 33 | 46 | 48 | 67 | 100 | 96 |
| Completion rate | 55% | 52% | 54% | 53% | 48% | 49% | 40.1% | 39% | 38% |
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