Over 2.5 billion adults do not have access to a formal bank account, most of them in developing economies says the ITU but Internationally standardized ‘mobile money’ platforms might as well increase financial inclusion and help benefit various social and economic sectors worldwide.
The International Telecommunications Union (ITU) has established a new Focus Group on Digital Financial Services to promote financial inclusion using information and communication technologies (ICT) in response to a proposal from the Bill & Melinda Gates Foundation, which is a member of ITU’s Standardization Sector (ITU-T).
According to ITU Secretary-General Hamadoun I. Touré, “The extraordinary impact of mobile money solutions in developing countries has highlighted that ICTs are at the heart of innovation in financial services. What is lacking is an international standard that will allow interoperability between the services offered by different operators.”
Digital financial services are capable of improving the delivery of basic financial services. Standards will drastically reduce the costs of these services to service providers and their customers, thereby opening the door to remote and underserved communities.
“Poor people lead incredibly complex financial lives. Cut off from even the most basic banking services, they are trapped in a cash-based system that is risky, expensive, and inefficient – a system that prevents them from buffering against risk and investing in their futures,” said Rodger Voorhies, Director of the Financial Services for the Poor team at the Bill & Melinda Gates Foundation. “Having a strong partner like ITU working to advance financial inclusion in developing countries and emerging markets by harnessing the power of digital technologies will be instrumental in helping to create opportunities for people to build better lives.”
The Focus Group is open to participation by any interested party and will develop an international standardization roadmap for interoperable digital financial services as well as a regulatory toolkit to help national policymakers and regulatory authorities encourage the adoption of these services. It will also identify the technology trends in digital financial services expected to emerge over the coming years and how the roles of various stakeholders in this ecosystem will evolve in response. In its work to pinpoint successful use cases for the implementation of mobile money in developing countries, it will pay particular attention to the associated benefits for women.
The Focus Group will also look technical requirements – such as the required architectural frameworks for digital financial services and the security of mobile transactions plus issues regarding to policy and regulation, consumer and fraud protection, and the sustainable business models.