Digital Financial Services (DFS) - Alliance for Financial Inclusion

DFS and Financial Inclusion

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 policymaking 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.

DFS Policies

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).

DFS and Gender

Digital Financial Services (DFS) remains one of the key drivers to accelerate women’s financial inclusion and empowerment, and to closing the gender gap in access to financial services. This is attributed to the convenience and affordability of financial services offered through DFS, helping address the challenges of mobility, and bringing convenience and safety to the women, as they transact in the comfort of their own spaces.

Resultantly, there has been remarkable growth in the adoption of DFS in the AFI network. While there has been an exponential growth in the use of DFS globally, the gender gap is persisting. The good news, however, is that technology is continually evolving, providing a chance to explore new ways of customizing financial services to the unique needs of women.

DFS Maya Declaration commitments by AFI members

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.

Primary thematic area		2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
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	181	215	258
	Completed	21	27	37	38	43	47	48	60	65	80	95	120
	In progress	17	25	30	33	46	48	67	100	96	101	120	138
	Completion rate	55%	52%	54%	53%	48%	49%	40.1%	38%	39%	44%	44%	46.51%

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AFI’s Digital Financial Services Working Group (DFSWG)

A platform for policymakers to discuss regulatory issues relating to digital financial services, including mobile financial services, branchless banking, electronic money and digital payment solutions.

DFSWG aims to promote digital financial services as a major driver of greater financial inclusion in emerging and developing countries.

It encourages policymakers to exchange experiences to develop a shared understanding of the risks in emerging digital financial services business models. At the same time, it works with global standard-setting bodies in order to represent the voice of developing and emerging countries.

Chair

Dr. Josephat Mutepfa, Reserve Bank of Zimbabwe

Co-Chair I

Tsolmontuya Bold, Financial Regulatory Commission Mongolia

Co-Chair II

Gitau Mburu, Central Bank of Kenya

Gender Focal Point I

Linda Dlamini-Khumalo, Central Bank of Eswatini

Gender Focal Point II

Vacant

KEY OBJECTIVES

Create an enabling policy and regulatory environment for transformational DFS at national levels;
Develop a shared understanding of the risk profiles of emerging digital financial services business models, which is essential in designing appropriate regulatory frameworks;
Stimulate discussion and learning on new approaches and good practices in DFS regulation by encouraging policymakers to exchange experiences;
Provide a platform for capturing, tracking and sharing information on innovative DFS, products, business models and appropriate new policy responses;
Establish linkages and provide inputs, where appropriate, to global Standard-Setting bodies (SSBs) and other stakeholders seeking to establish proportionate supervisory practices for DFS.

SUBGROUP AND PLANNED ACTIVITIES

Policy approaches to Virtual Assets (VA) and Virtual Asset Service Providers (VASP) (joint with GSPWG)

Description: The objective of this knowledge product (KP) is to support the AFI network with policy guidance and approaches to:

i. financial inclusion use cases for VAs and VASPs particularly from experiences and proven pilots led in the private and humanitarian sectors whereby there have been concrete instances or evidence of contribution and advancement of financial inclusion;

ii. VAs and VASPs policy decisions covering regulation (where applicable) and supervision, including how the balance between financial inclusion, financial integrity, financial stability, and consumer protection can be achieved.

Planned deliverable: Guideline Note on Virtual Assets and Virtual Assets Service Providers for Financial Inclusion: Policy and Regulatory Approaches

DFS and FinTech Ecosystem Data for Supervision and Market Intelligence

Description: To provide clear and actionable guidance on DFS and FinTech ecosystem approaches to data collection, usage (within defined limits and addressing questions on the why, what, how), and decision making for broad outcomes and implications, including ecosystem intelligence gathering, proactive decision making, market conduct and supervision amongst other policy goals.

Planned deliverable: Guideline Note on DFS and FinTech Ecosystem Data for Supervision and Market Intelligence

KNOWLEDGE PRODUCTS

2024

FinTech and Digital Financial Services Ecosystem Data for Supervision and Market Intelligence

2023

2022

2021

2020

2019

2018

2017

Guideline Note 29: National Retail Payment

2016

Guideline Note 19: DFS Basic Terminology

2014

2013

PEER REVIEWS

Maldives Monetary Authority
Regulation of Payment Services
SEPS Ecuador
Cybersecurity
BCR El Salvador
National Fintech Strategy
Maldives Monetary Authority
Guideline and Regulation on Electronic Customer Due Diligence
Bangko Sentral ng Pilipinas
Enhancing the Guidelines on Electronic Know-Your-Customer (e-KYC)
Reserve Bank of Zimbabwe
Regulatory Sandbox Guidelines
Banco Central de Reserva El Salvador
Draft Law for the Promotion of FinTech Entities and Regulation of Digital Financial Services
Bank of Papua New Guinea
Regulatory Sandbox Guidelines and the e-KYC Prudential Standards
Reserve Bank of Vanuatu
Draft Guideline on Oversight on Retail Payments Systems (RPS) in Vanuatu
Central Bank of Mauritania
Draft Digital Payments Strategy
Bank of Namibia
Determination on Issuing Electronic Money in Namibia
Bank of Uganda
Draft National Payment Systems Fair Competition Regulations
Reserve Bank of Vanuatu
Draft Regulatory Sandbox Framework

MEMBER INSTITUTIONS

Autorité de Contrôle de la Microfinance
Agency of the Republic of Kazakhstan for Regulation and Development of Financial market
Banco Central de Reserva de El Salvador
Banco Central de São Tomé e Príncipe
Banco Central del Paraguay
Banco de Moçambique
Banco Nacional de Angola
Bangko Sentral ng Pilipinas
Bangladesh Bank
Bank Al-Maghrib
Bank Negara Malaysia
Bank of Ghana
Bank of Namibia
Bank of Papua New Guinea
Bank of Sierra Leone
Bank of Tanzania
Bank of Uganda
Bank of Zambia
Banque Centrale de la République de Guinée
Banque Centrale de Madagascar
Banque Centrale de Mauritanie
Banque Centrale de Tunisie
Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO)
Banque Centrale du Congo
Banque de la République d’Haiti
Banque de la République du Burundi
Central Bank of Armenia
Central Bank of Egypt
Central Bank of Eswatini
Central Bank of Jordan
Central Bank of Lesotho
Central Bank of Liberia
Central Bank of Nigeria
Central Bank of Samoa
Central Bank of Seychelles
Central Bank of Solomon Islands

Central Bank of Sri Lanka
Central Bank of the Bahamas
Central Bank of The Gambia
Central Bank of the Republic of Uzbekistan
Central Bank of Sudan
Centrale Bank van Suriname
Comisión Nacional Bancaria y de Valores de México (CNBV)
Comisión Nacional de Bancos y Seguros de Honduras
Comisión Nacional de Bancos y Seguros de Honduras
Délégation Générale à l’Entreprenariat Rapide des Femmes et des Jeunes (DER F/J)
Direction Générale du Trésor, Ministère de l’Economie et des Finances, Madagascar
Jordan Payments and Clearing Company
Microcredit Regulatory Authority of Bangladesh
Ministère de l’Economie et des Finances, Madagascar
Financial Regulatory Commission of Mongolia
Maldives Monetary Authority
Ministère de l’Économie et des Finances de la Côte d’Ivoire
Ministère des Finances et du Budget du Sénégal
Ministry of Finance – Eswatini
Ministry of Finance and National Planning Zambia
Ministry of Finance and Economic Planning Zimbabwe
National Bank of Cambodia
National Bank of Rwanda
National Bank of Tajikistan
National Reserve Bank of Tonga
Nepal Rastra Bank
Palestine Monetary Authority
People’s Bank of China
Reserve Bank of Fiji
Reserve Bank of Malawi
Reserve Bank of Vanuatu
Reserve Bank of Zimbabwe
South African Reserve Bank
State Bank of Pakistan
Superintendencia de Banca, Seguros y AFP del Peru
Superintendencia de Bancos de la República Dominicana
Superintendencia de la Economía Popular y Solidaria de Ecuador
Superintendencia General de Entidades Financieras de Costa Rica (SUGEF)

SNAPSHOT

	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Events	1^st: Cape Town, South Africa 2^nd: Bali, Indonesia	3^th: Bangkok, Thailand 4^th: Riviera Maya, Mexico	5^th: Moscow, Russia 6^th: Cape Town, South Africa	7^th: Antigua, Guatemala 8^th: Kuala Lumpur, Malaysia	9^th: Arusha, Tanzania 10^th: Port of Spain, Trinidad & Tobago	11^th: Kuala Lumpur, Malaysia 12^th: Maputo, Mozambique	13^th: Yerevan, Armenia 14^th: Nadi, Fiji	15^th: Accra, Ghana 16^th: Sharm ElSheikh, Egypt	17^th: Aman, Jordan 18^th: Sochi, Russia	19^th: Nassau, The Bahamas 20^th: Kigali, Rwanda	21^th: Virtual Meeting 22^th: Virtual Meeting	23^th: Virtual Meeting 24^th: Virtual Meeting
Member Institutions	N/A	N/A	32	46	50	59	65	66	62	62	66	68
Knowledge Products (aggregate)	0	0	0	4	8	8	9	10	14	19	21	28
Policy Changes (aggregate)	4	10	14	23	37	44	54	91	97	143	184	TBD
Peer Reviews (aggregate)	0	1	6	8	10	13	15	16	18	19	20	TBD

Digital Financial Services Working Group (DFSWG)

Digital Financial Services Working Group (DFSWG)

Webinars

Digital Financial Services
Working Group (DFSWG)

Digital Financial Services
Working Group (DFSWG)