By Emmanuel Elebeke
THE fact that Governments around the world face similar challenges in their efforts to deliver fully integrated digital financial services is not in doubt.
But the International Telecommunication Union, ITU Focus Group on Digital Financial Services (DFS) after two years of extensive consultation, has concluded its work with the publication of 85 policy recommendations and 28 supporting thematic reports to address the challenge.
The Focus Group brought together more than 60 organizations from over 30 countries to drive greater financial inclusion for the estimated 2 billion people around the world who remain unbanked.
Until now solutions have largely been developed in isolation but the ITU group is offering for the first time, a comprehensive set of practical and integrated guidelines drawing on expertise from across the financial service and telecommunication/ICT sectors.
Commenting on the success of the Focus Group, ITU Secretary-General Houlin Zhao said: “Governments around the world face many similar challenges in their efforts to deliver fully integrated digital financial services.
He added that: “By reviewing and assessing international best practices we have developed a practical toolkit that can be adapted to local needs. We hope it will help drive greater access and opportunity through the delivery of more affordable, accessible, secure, transparent and robust digital financial services for consumers and merchants in emerging markets.”
The 85 policy recommendations, he said offers guidance in areas such as digital liquidity, consumer protection to enhance DFS usage, data privacy, digital identity and e-KYC (Know Your Customer), as well as interoperability and fair access to the communication channel. Some of its core suggestions include: Policymakers and regulators should support the growth of an open ecosystem for DFS that promotes innovation and ensures robust competition
Regulators should standardize definitions of fraud types and require standardized, electronic and timely fraud reporting from providers
Access criteria for interoperability schemes should be clear, objective, publicly disclosed and allow new participants, banks and authorized /regulated non-banks to join
Policymakers should promote initiatives and incentives that encourage merchants and other payment acceptors (e.g. utilities, farmers, government entities ) to accept electronic payments
Regulators should standardize digital identity registration, and ensure interoperability between DFS operators and service providers relying on digital identity. DFS operators should build in customer privacy measures, compliant with current or anticipated national legislation among others.