Page 78 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

44. The planning framework for the initiative should underpin the cooperative and consultative
arrangements established for the preliminary and exploratory discussions. It is important that all relevant
stakeholder groups remain involved as needed throughout the initiative life cycle.
45. The diagnostic exercise should provide a comprehensive picture of the relevant environment. The
diagnostic exercise is the basic exercise from which most of the preliminary analysis of the agreement’s
implication and requirements would draw. The diagnostic exercise should be broad in terms of scope and
sufficiently detailed. It should cover national interoperability agreements, the key payment and financial
instruments used, the types of financial institutions and other participating institutions and service providers,
the relevant financial sector legislation and regulations, and the relevant private sector industry associations
and public sector regulatory and oversight bodies. Also, it should have a strong focus on the organization,
operations, and technical capabilities of the participating national PSIs, the organization, market structure, and
market practices and conventions in key financial markets that will benefit from the international interoperability
agreement; and the fundamental legal and regulatory environment in which they operate. It should also cover
in detail the lessons and best practices from comparable national and international interoperability agreements
elsewhere.
46. The diagnostic exercise should be followed by a substantial gap analysis. In the gap analysis, the major
differences in the key aspects of the national PSIs should be identified, and their strengths, weaknesses,
opportunities, challenges, and risks for successful interoperability would need to be assessed. Comparators
or benchmarks for the gap analysis should be developed, taking also into account the relevant oversight
standards and principles discussed in the companion report on Payment System Oversight and Interoperability,
the applicable technical standards and best practices derived from comparable national and international
interoperability agreements. The detailed understanding of the critical gaps should highlight the necessary
changes that participating national PSIs will need to undertake in order to ensure safe and efficient
interoperability services. The steering committee and project management team (see below) should develop
a plan for all such gaps to be addressed effectively, and ensure that this plan be supported and adopted by
the various stakeholder groups.

Principle 5: Public authorities and private sector stakeholders who consider establishing an international
interoperability agreement should develop a strong business case that evaluates not only the information
from the diagnostic exercise and subsequent analyses, but also the benefits, costs, and risks of alternative PSI
interlinking arrangements.
Key issues

5.1 The public authorities and private sector stakeholders should devise a feasible, risk-robust interlinking
model for PSI interoperability, based on consultations and discussions among all stakeholders around
the diagnostic and business case analyses.

5.2 The public authorities and private sector stakeholders should outline the selected interoperability solution
as comprehensively as possible with due regard to the results of the studies and analyses performed
during the planning stage.
5.3 The public authorities and private sector stakeholders should specify the business framework for the new
agreement, including its organization, management and governance, business management functions,
operational scope and core business functions, business practices and controls, rules and procedures,
and technical conditions and standards, among the main features.
47. The planning stage should conclude with the development of a detailed business case evaluation to
assess the viability of the agreement at the most realistic level possible. The business case analysis should
be a construction of scenarios of expected quantified future use, cost-savings and net benefit allocation over
one or more future intervals (e.g., 1, 3 and 5 years). The diagnostic exercise and the gap analysis should provide
many of the key inputs for this purpose, like the model(s) deemed most feasible for PSI interlinking. Through
completion of the business case evaluation, the project’s planning and governance framework should be able
to visualize more definitively the type of PSI interlinking model that might best suit the initiative.

68