The International Telecommunication Union (ITU) Focus Group on Digital Financial Services has published two further reports as it seeks to develop an international framework of good practice guidelines for regulators, operators and providers in the telecom and financial services sectors. In addition to the four research papers published last month it has now released two new reports: one on regulation in the DFS ecosystem and another on consumer protection.
ITU Secretary-General Houlin Zhao said: “Regulation must nurture the development of a strong and healthy digital finance sector. Given the complexity of the regulatory environment, it can often be a challenge for telecom and financial services regulatory bodies in many emerging markets to collaborate in developing national guidelines. For the first time the Focus Group has sought to identify a clear framework that regulators around the world can use. I believe also that the work being done will contribute significantly towards reducing global poverty, helping therefore to achieve the first Sustainable Development Goal.”
The Focus Group Paper ‘Regulation in the Digital Financial Services Ecosystem’ identifies categories of regulation and addresses a number of issues relating to managing the regulatory environment. It includes an analysis of how regulators currently work together and provides a model memorandum of understanding that national regulators can adopt to formalise their collaboration and interaction in view of co-regulating the DFS marketplace.
Director of the ITU’s Standardization Bureau, Chaesub Lee stated that “Both telecom and financial services regulators have a crucial role to play in rolling out digital financial services that are accessible to everyone around the world. Collaboration between the telecom and financial services regulators can therefore ensure a conducive regulatory environment for digital financial services to flourish.”
Sacha Polverini, Chairman of the Focus Group and Senior Programme Officer of the Bill & Melinda Gates Foundation’s Financial Services for the Poor programme, said: “Trust is an essential ingredient for digital financial services to succeed. The move away from cash will only work if the solutions and processes being put in place to replace it are reliable, trustable and easy to use. This is why consumer protection is an essential part of the work we have been doing.”
Consequently the Focus Group Paper ‘Commonly identified Consumer Protection themes for Digital Financial Services’ identifies four common themes that policy makers or regulators may want to consider when developing laws, regulations or guidelines around consumer protection. This includes provision of information and transparency, fraud prevention, dispute resolution and data privacy and protection.
The Focus Group is continuing its work and will publish its next set of research papers after its upcoming meeting in September 2016 in Tanzania focussing on the work of the four Working Groups: DFS Ecosystem, Consumer Experience & Protection, Interoperability and Technology, Innovation & Competition.