Page 290 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

non-bank financial institutions and not full-fledged postal banks, with the latter – which represent less than
10% of all Posts – generally having much more experience in providing a wide range of financial services and
generally employing more knowledgeable and experienced personnel from the financial services industry.

3 The Role of Postal Networks in Digital Financial Services

In the Digital Financial Services Ecosystem, postal networks can play a role both as DFS providers and as
DFS providers support services. The SWOT analysis below helps understand why postal operators developed
different business models:

Figure 3 – SWOT

Strengths: Threats:
Ubiquitous physical network Declining traditional postal market => limited possibility
Cash management experience (at least for a large number to invest
of Posts) Exponential growth of mobile money operators / card
Experience in managing agents networks / digital financial service providers
In many countries, trust and proximity to clients Current price structure of postal financial products not
always adapted to very small amounts
Experience in distributing large volume / low margins
products and services
In many countries, financial inclusion mission assigned by
governments (explicitly or not)
In a number of countries: regulatory approval
Weaknesses: Opportunities:
Lack of technological innovation Experience in financial transactions which can be a
Lack of customer orientation building block to expand activities in the field of digital
financial services:
Insufficient connectivity of the postal network (and in
some cases, lack of access to electricity) – Agents for cash in/cash out
Lack of resources needed to invest in development of a – Super-agent
digital financial service – Strategic partnerships/joint ventures
In some cases, challenges with liquidity management – As a trusted public actor, interconnection tool for
mobile money providers
– Launch own digital financial service

4 Posts as support services

Posts can act as partners of DFS providers such as banks, card networks, or mobile money providers, and help
these offer or distribute their financial services. In this regard, Posts have implemented a variety of business
models which are all variations of the BM1 and BM3 models described above.

4.1 BM1: Cash-merchant

• Cash-merchant for a Money transfer operator (MTO) or bank to offer remittance services:
• DPOs from 126 countries or territories have signed agreements with international MTOs or banks
whereby they perform cash-in / cash-out services for domestic and/or international remittances.

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