Today the International Telecommunication Union (ITU) Focus Group on Digital Financial Services has published the first of a series of thematic reports on Digital Financial Services, or DFS. The DFS Focus Group is looking at helping local policy and decision makers to accelerate their work on financial inclusion by providing practical tools, guidelines and recommendations on issues that are currently preventing the DFS market to develop organically. This represents the first step in developing an international roadmap of best practice guidelines for regulators, operators and providers in the telecom and financial services sectors and serving the unbanked in a sustainable manner.

Specifically focused around two of the four working groups, DFS Ecosystem and Consumer Experience and Protection, the four background documents were endorsed at the Focus Group's recent meeting in Washington DC.

ITU Secretary-General Houlin Zhao said: "What makes this Focus Group different is its holistic approach. After more than a year of intensive work, experts are completing some preliminary analysis and have started to develop a robust and relevant framework together with very pragmatic recommendations that will hopefully deliver real change and opportunity."

Sacha Polverini, Chairman of the Focus Group and Senior Programme Officer of the Bill & Melinda Gates Foundation's Financial Services for the Poor (FSP) programme, said: "Our initial observations provide two things: firstly, the publication of the Digital Financial Services Ecosystem report provides an agreed understanding between all relevant parties; secondly,  our analysis of key elements of the process, such as issues around merchant acceptance and the role that national identity schemes can play, has helped provide a better understanding of how we can facilitate greater access to DFS in emerging markets.  We made some surprising findings."

Carol Coye Benson, Managing Partner at Glenbrook Partners and Working Group Co-Chair for DFS Ecosystem, added: "The key challenge in reaching digital liquidity is to balance both sides of the equation. To get real value it's important to drive money into the system and to keep it in. The way to do that is to enable bulk (G2P) payments into transaction accounts and simultaneously enable merchant electronic payment acceptance, so that consumers have a place to spend their e-Money."
Reports from the DFS Focus Group:

1. The Digital Financial Services Ecosystem: Maps the overall ecosystem of DFS, identifying all key stakeholders, and looks at the critical elements necessary to make the ecosystem develop so that it encourages and enables financial inclusion policies.
2. Enabling Merchant Payments Acceptance in the Digital Financial Ecosystems: Describes the merchant services value chain, develops a segmentation scheme for different types of payments acceptors, and identifies the payments-related attributes of each segment. It also develops suggestions on ways to accelerate the adoption of electronic payments acceptance.
3. Review of National Identity Programmes – A report from the Evans School of Public Policy and Governance: Looks at 48 national identify programmes in 43 developing countries. With identification systems becoming more common across Latin America, South and Southeast Asia, and Sub-Saharan Africa, the report concludes that not only is penetration much higher than expected, but so are the number of biometric national ID programmes. It evaluates how these programmes are being used to drive provision of DFS services.
4. Quality of Service (QoS) and Quality of Experience (QoE) aspects of Digital Financial Services: This Report identifies and proposes Key Performance Indicators (KPIs) to be considered for digital financial services.

The remaining Focus Group deliverables will be published incrementally from now through to the end of the year, focused around the two remaining meetings scheduled in East Africa in September, and the final meeting in Geneva in December 2016. The final recommendations are scheduled to be published in January 2017.

Notes to the Editor
In 2014, ITU established a dedicated Focus Group incorporating 60 organizations from some 30 countries. The Focus Group has created four thematic working groups covering the following areas: DFS ecosystem; Technology; Innovation and Competition; Interoperability and Consumer Experience & Protection. The group's goal is to develop guidelines, principles and toolkits based on international best practices, which will be adapted and implemented by countries looking to capitalize on digital and mobile technologies in their efforts to increase access to basic financial services for people that today remain at the margin of society.