The International Telecommunication Union (ITU) Focus Group on Digital Financial Services (DFS) has published two new reports – one on regulation in the DFS ecosystem and another on consumer protection.
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.
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. Until now solutions have largely been developed in isolation. This is the first time an organization has sought to develop a comprehensive set of practical and integrated guidelines drawing on expertise from across the financial service and telecommunication/ICT sectors.”
He adds: “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 offer 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
Full details on the recommendations can be found here.