Page 41 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Of the countries in which DFS are currently offered, 64% license MNOs to provide DFS, 35% and 32% allow
MNOs to offer DFS through joint ventures and wholly controlled subsidiaries, respectively.

For those that mandate DFS, over half address ‘quality of service’, ‘interconnection’, ‘consumer protection’ and
‘access’. Few address ‘intellectual property’, ‘risk management’ and ‘licensing for product design’. For those
that supervise DFS, areas of supervision largely mirror the results of mandating.

Over 80% of respondents coordinate with the Central Bank in some form on DFS – over half citing a formal
relationship with 20% citing an MOU, and 33% citing a Task Force. Similar results are yielded as it relates to
coordinating on financial inclusion. Coordination with the Ministry of Finance also proves common, though
more often through occasional consult rather than an MOU or Task Force. Given the frequency through which
coordination proves valuable, the Ecosystem Working Group has outlined a template for an In-Country MOU
below.

3.3 Template for an In-Country Memorandum of Understanding

The purpose of this document is to provide a template, or starting point, for countries interested in drafting
a memorandum of understanding (MOU) between the financial services regulatory authority(ies) and
telecommunications authority(ies), as it relates to digital financial services and financial inclusion.

Additionally, it may be relevant and/or necessary to include other authorities (e.g. competition authorities,
consumer protection authorities) in the agreement.

3.3.1 Parties Involved

The <Authority 1> was established to <formal explanation of authority 1 role>

The <Authority 2> was established to <formal explanation of authority 2 role>

<AS NEEDED>The <Authority 3> was established to <formal explanation of authority 3 role>

<AS NEEDED>The <Authority 4> was established to <formal explanation of authority 4 role>

3.3.2 Basis

In recognition of the growing convergence of telecommunications and financial services in what has been
identified as digital financial services, the Regulatory Authorities have identified a need for regulatory interaction
and collaboration to ensure the integrity, security, stability and protection of participants and end users as
these services are rolled out.

3.3.3 Purpose

This MoU is established in respect to the mandate of the statute regulating each entity. The purpose of this
memorandum is to provide a framework for the <Authority 1> and <Authority 2> and <AS NEEDED: Authority
3 and 4> to collaborate with one another regarding the regulation and supervision of digital financial services
in <COUNTRY>. This MoU aims to promote the integrity, efficiency (for better use of public funds/budget) and
efficacy of participants by improving effective regulation and enhancing the supervision of digital financial
services. This MoU is entered into on the basis of mutual respect, in a spirit of goodwill and does not affect
the independence of the parties herto.

29