This document discusses key considerations for regulating agents in digital financial services. It recommends authorizing agent use through a risk-based approach focusing on operational risks, consumer risks, and anti-money laundering risks rather than approving individual agents. Ongoing supervision of agents should include targeted inspections of providers and agents according to materiality and risks. Reporting requirements should be proportionate. Ensuring a level playing field between bank and non-bank agents is important. Regulations should set minimum standards without restricting growth potential and allow for tiered agent structures.

1. The Enabling Environment for
Digital Financial Services
Stefan Staschen
10 March 2016

2. Main determinants of success
Regulation
Agents
Issuers
Transaction limits
Registration
Customers
Sign up
Active Use
Product design
Pricing
Platforms
Agents
Sign up
Training
Management
(i.e. liquidity,
branding,
equipment, etc.)
Business
Models
Provider
Product design
Pricing
Platform

3. Basic Principles and Key Issues in Creating
an Enabling Environment for DFS
Mohammad Moniruzzaman, 2009 CGAP Photo Contest
3

4. Proportionality
Proportionate regulation maximizes the net-benefit of regulation
Benefits Costs
This is best to be
achieved following a risk-
based approach that
allows for rationalizing the
use of scarce supervisory
resources by focusing on
issues posing the highest
risk to the achievement of
the regulatory objectives
of inclusion, stability,
protection, and integrity
(I-SIP)
4

5. Level Playing Field
Same risks should be treated in the same way, different risks differently
No material differences
between regulatory
treatment of agents
hired by banks and
nonbanks, as long as
they offer the same
products
Regulation based on
function, not on institutional
type, e.g.
• E-money accounts can
be issued by banks and
nonbanks
• Agents can be used by
various types of financial
service providers
• Financial consumer
protection rules apply to
entire range of financial
service providers
Provide scope for
banks and different
types of nonbanks
(MNOs and others) to
compete on equal
footing

6. DFS regulation impacts every participant in the DFS value chain
FSP ClientAgent
DFS
participant
Regulatory
environment
Prudential
regulation of banks
and e-money
issuers
1 Agent regulation2 KYC regulation3
Consumer
protection
regulation
4
6
Competition regulation

7. “Basic regulatory enablers” in digital financial services
Broad consensus about short
list of most critical topics
1. E-money issuance
2. Agents
3. AML/CFT
4. Competition
5. Consumer protection
Nonbank players permitted?
Bank and nonbank agents?
Tiered, risk-based KYC structures?
Different types of institutions?
Tailored to specific risks?
Main issues
7

8. Bangladesh
Ghana
India
Kenya
Myanmar
Pakistan
Rwanda
Tanzania
Uganda
E-Money No Yes Yes Yes No No Yes Yes Yes 67%
Agent
networks
Yes Yes Yes Yes Yes Yes Yes Yes No 89%
Tiered KYC Yes Yes Yes Yes No Yes No Yes Yes 78%
Multiple
institutions
No Yes Yes Yes No No Yes Yes No 56%
Consumer
protection
Yes No No Yes No Yes No No Yes 44%
Overall score 60% 80% 80% 100% 20% 60% 60% 80% 60% 67%
A snapshot of basic enablers in nine countries
CGAP has been working on
Positive
regulatory
changes in
recent years
Areas in which
change is
relatively likely
to happen soon
8

9. Regulating Nonbank E-Money
Issuers
Md Farhad Rahman, 2013 CGAP Photo Contest 9

10. The banking part of DFS regulation
FSP ClientAgent
DFS
participant
Regulatory
environment
Prudential
regulation of banks
and e-money
issuers
1 Agent regulation2 KYC regulation3
Consumer
protection
regulation
4
10
Competition regulation

11. Bank Agent Client
Nonbank (e.g.,
MNO)
What difference does it make for regulatory treatment?
Bank
Contractual relationship

12. It is important to draw clear lines between payment,
e-money, and deposit
Payment Electronic money Deposit
Definition
Who can issue?
Prudential
requirements
Deposit insurance
Transfer between
two parties; Time
restricted (e.g. within
T+3)
Special type of repayable
funds with transaction
focus
“Repayable funds”,
intermediation
Payment Service
Providers
E-Money Institutions;
regulated financial
institutions
Regulated
financial
institutions
Low Medium High
NA In most cases not Typically yes

13. Fund safeguarding and fund isolation
are two key regulatory provisions
Fund safeguarding
Maintain liquid assets
equivalent to e-float
Restrictions on use of
funds
Diversification of e-
float fund holdings
Fund isolation
Ownership of funds
Trust account/escrow
account
Issuer failure:
hierarchy of claims

14. Transaction limits constitute additional
risk mitigation measures
Maximum transaction values
Maximum value of individual transaction
Maximum monthly/periodic load
Maximum holdings

15. “Emerging regulatory enablers” in DFS
Paying interest to
e-money holders
Typically not permitted in
order to differentiate from
banking
Could be “pass through”
of interest on pooled
account
Bringing e-money accounts
under deposit insurance
Coverage limits too low or
e-money excluded from
coverage
Pooled accounts in
insured institutions can
provide coverage for each
customer

16. How about the three models we introduced yesterday?
The pure bank model: Equity Bank
• Using telco as channel
• MVNO license provides access to SIM
The standalone payments model: bKash
• MFS Guidelines: bank-led model
• Behaves very similar to e-money model
The non-bank model: Airtel Money
• In most countries directly licensed by the regulator
• In a few it’s more complicated: e.g. Uganda, India

17. Basic enabler #1: Regulations permitting and governing e-money
India - yes
No nonbank e-money
issuance, but:
• Prepaid Payments
Instrument Issuers
(Restrictions on cash-
out/requirements to
partner with banks)
• New: Payments banks
Pakistan - no
Different types of banks can
issue stored value accounts
and MNOs have been
permitted to own majority
stake in banks
Bangladesh - no
Not really, but –
• bKash very much operates
like a nonbank e-money
issuer
Rwanda - yes
E-money issuer defined in
PSP regulations, but same
rules apply as for PSPs
except for trust account rules
Uganda - yes
Mobile money service providers
(MNOs and other nonbanks) can
offer e-money services, but in
partnership with banks as the
entity receiving the regulator’s no
objection
20

18. What do we want to see and how do we get there?
Nonbanks or limited
purpose banks can
issue e-money /
stored value
accounts / small
savings accounts
Sufficient fund
safeguarding and
fund isolation rules
Not subject to full
range of prudential
regulations applied
to financial
intermediaries
Appropriate
e-money
regulation
National Payment
System Law or
clear authority in
another law to
regulate payment
system
Implementing
regulations
governing the
issuance of e-
money by nonbanks
(and banks?)
Alternatively:
Limited purpose
banks
(“differentiated
banks”, niche
banks)
Typical
steps
required to
get there
21

19. REGULATORY REFORM TO
ADVANCE FINANCIAL INCLUSION:
A CASE STUDY OF GHANA
ELLY OHENE-ADU, BANK OF GHANA
MARCH 2016

20. Background
• During early to mid 2000s, Ghana recognised
the need to expand the boundaries of financial
services
• MM technology was introduced in the same
period providing a window of opportunity to
extend financial services to rural areas
• In 2008, Ghana issued guidelines on Branchless
Banking (BB) focused on a bank-led and bank-
based approach to BB

21. Branchless Banking Guidelines
• Mobile money viewed as a channel for use by only
banks and deposit-taking financial institutions to
reach unbanked segments of the population
• MNOs and other Non-banks: Regarded as Agents to
make their platforms available to banks to use
• Mandated that banks alone should lead the process,
own the customers as well as the agents
• Interoperability: “Many-to-many” model - Group of
banks to partner with a group of MNOs; agents were
required to be shared

22. Poor incentives weakening supply-
side deployments
• Banks were mostly disinterested; Happy to keep
the float accounts
• Active banks reluctant to make investments in
new developments for fear of free-riders
• MNOs made investments, did all the work but
were in contravention of the regulations
• Weak support of agents by banks stifled the
adoption of Mobile Money by users

23. Low access to financial services
According to Finscope Report of 2010……
• 59% of population lived in rural areas
• 56% adults had access to financial services
– 41% formal, 15% informal
• 44% had no access at all and were financially
excluded
• Only 34% of Ghanaians had a bank account
• However, 80% of population had access to mobile
phones (Also in rural areas)

24. The Financial Landscape in Ghana
2010
Finscope Survey, 2010
34% 7% 15% 44%
Bank Non-bank formal Informal only Excluded

25. The Solution:
• Innovation
• Incentives
• Security
• Risk Management
• Consumer Protection
• Well articulated sanctions

26. The Solution: Revise, Experiment, Monitor
• Introduce clear, pragmatic and flexible regulation
that would enable and foster a healthy
environment for financial inclusion to succeed
• Revise the BB Guidelines to fit market dynamics
• Adopt flexible experimental stance (Kenya,
Philippines, Tanzania, Mexico)
• Adopt proportionate risk-based approach to
regulation
• Keep eyes on the ball: Monitor and manage
emerging risks

27. EMI GUIDELINES

28. Engineering Incentives
• Allow non bank-led model but require them to
establish non-bank subsidiaries licensed and
regulated by the central bank
• Abolish many-to-many requirement to free
operators from tight and unmanageable
relationships
• Mandate Non-banks to keep the float with RFIs
• Designate a 15% threshold beyond which the
float should be split and transferred to other
banks to safeguard against bank insolvency

29. Engineering Incentives
Financial Inclusion:
• A three-tiered account structure with related
transaction limits; risk-based approach to KYC
and CDD so that Individuals with little ID could be
included in the formal financial sector
• Require float-holding banks to pay interest on the
float
• Require electronic money issuers to pay not less
than 80% of interest to account holders

30. Engineering Incentives
• Establish strong consumer protection,
complaints resolution structures to afford
consumers safeguards against abuse
• Set technology, security and compliance
framework with requirement for certification
in PCI DSS and ISO 27001 standards
• Detailed reporting requirements
• Well articulated sanctions

31. Permissible Transactions
▪ Domestic payments
▪ Domestic money transfers, including to and from
bank accounts
▪ Bulk transactions (Salaries, benefits, pensions etc.)
▪ Cash-in-cash out transactions
▪ Over-the-counter transactions
▪ Inward international remittances
▪ Savings/credit products under-written by
Regulated Financial Institutions (RFIs)
▪ Insurance products under-written by duly licensed
insurers.

32. Implementation Challenges
• Negative reaction from banks
• Requirement for agents to take images of
photo IDs of customers upon presentment
• Requirement for compliance with ISO and PCI
DSS standards
• Interest payment and its sharing between
DEMIs and account holders

33. A changed picture in 2015
Access Strand in FII 2015 vs FinScope 2010
Note: Figures show access to services, not accounts
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded

34. The main driver in Ghana has been nonbank formal services
Access to these services tripled in five years
34%
36%
7%
22%
15%
17%
44%
25%
2010
2015
Bank Non-bank formal Informal only Excluded
3x

35. Exercise
The Central Bank of Gagastan

36. AML/CFT: do
transaction
limits provide
sufficient
comfort?
Need of
regulatory
oversight for
simple
“payment
services”?
Interest
payment and
deposit
insurance on e-
money
accounts?
Transaction limits
as sufficient
AML/CFT
measure?
Rules on use of
prepaid funds?

37. GMB Akash, 2011 CGAP Photo Contest
Regulating bank and
nonbank agents
41

38. Regulating agents as a new channel
FSP ClientAgent
DFS
participant
Regulatory
environment
Prudential
regulation of banks
and e-money
issuers
1 Agent regulation2 KYC regulation3
Consumer
protection
regulation
4
42
Competition regulation

39. Which risks are regulators most concerned about?
Operational risk
 Agents as a new channel give rise to new operational
risks
 Issues such as IT continuity, contingency planning, and
internal controls
Consumer risks
 The other main concern of supervisors and one that
receives increasing attention
 Issues such as fraud, unauthorized fees, lack of receipt,
lack of liquidity (cash at agent), system downtimes,
inadequate dispute resolution, abusive treatment
Money laundering and terrorist financing risks
 The supervisors’ focus on this depends on importance of
the topic more generally (e.g., a high priority in Pakistan)
43

40. Authorizing the use of agents: Observed tools and techniques and
recommendations
Current practice Recommendation
Authorization of
channel use
and of
individual
agents
• 1 or 2 stage (channel
authorization and
authorization of
individual agents)
• Risk of delaying agent rollout/closure;
overstretching supervisory capacity  no
approval of individual agents and only new
authorization for significant changes to original
agent business proposal
What to check
at time of
authorization?
• Contract review
• Business and
operational plan
• Financial projections
• Agent due diligence
docs and agent roll-out
plan
• IT infrastructure
• Opportunity to bar poorly designed agent
businesses
• Use model agent contract to be approved by
supervisor or min. standard clauses
• Check contracts with third parties such as
aggregators
• Look at agents as part of broad operational risk
review of the supervised entity
45

41. Ongoing supervision: Observed tools and techniques and
recommendations
Current practice Recommendation
Inspecting
providers
• Targeted inspection vs. being
part of regular inspections
• Transaction simulations
• Agent due diligence
procedures
• Internal controls
• Access rules to IT system
• Transaction simulation
• Etc.
• Consider materiality of agent business
for the provider
• Make use of offsite analysis and
previous onsite inspections to plan for
visits
• Focus on headquarters and review of
risk management program
• Also visit agent network managers if
heavily involved in operation of agents
• Check quality of reporting process
Offsite surveillance • Wide range of intensity from
detailed database with data on
agent level to no regular
reporting on agent activities
• Only collect information that feeds into
the risk assessment or serves other
regulatory purposes (e.g., financial
inclusion monitoring)
• Automated process
• At a minimum quarterly reporting on
aggregate level
46

42. Ongoing supervision: Observed tools and techniques and
recommendations (contd.)
Current practice Recommendation
Inspecting agents • Random sample
• Targeted samples according
to certain criteria (top/worst
performers, most fraud
cases, most complaints,
etc.)
• Mystery shopping
• Most countries don’t do this
on a regular basis
• Inspect individual agents only with
very clear supervisory purpose
(e.g. To check price disclosure,
conduct transaction similations,
audit particularly problematic
agents) and prioritize targeted
sampling
Enforcement actions • Wide range of measures
available vs. only
withdrawal of letter of no
objection
• No serious enforcement
actions have been taken yet
• Sufficient enforcement powers
needed including changes in
contracts, suspending or
prohibiting certain practices, and
penalties
47

43. Two important issues to consider in agent regulations
How to ensure level playing field
between bank and nonbank agents?
Who can be an agent?
• No material difference between
bank and nonbank agents’
regulatory treatment (but bank
agents might be permitted to do
more)
• Best achieved by single regulation
covering both types of agents or by
identical regulations applying to
both types
• Otherwise risk of regulatory
arbitrage and contradictory
treatment of shared agents
• Liability of the provider core
element of both agent types
• Set minimum standards without
unnecessarily circumscribing
growth potential
• Business registration?
• Length of operations?
• Credit history?
• Criminal record?
• Avoid geographic restrictions or
barring certain legal entities from
operating as agents
• Allow for tiered agent structure and
use of agent network managers
48

44. Exclusivity
Non-
exclusivity
Should providers be allowed to impose exclusivity
on agents?
There is a trade off
between different
considerations and no
simple answer
Some countries have
opted for limited
exclusivity periods
Require technological
capability to
interconnect with other
payment systems

45. How does M-Shwari fit Kenya’s current legal framework?
 Bank product: The provider is a bank
(CBA) and the customers open bank
accounts with CBA  no e-money
involved
 No direct physical channel for
redeeming funds: M-Shwari customers
are not permitted to use CBA branches.
There are no M-Shwari agents.
Customers can only move money into
and out of their account by first
transferring it to M-Pesa (with a
corresponding change in the M-Pesa
float as the aggregate amount of e-
money issued changes)
50
 Neither agency banking nor e-money regulations apply, M-Shwari
customers use M-Pesa agents, but only after bank money has been
converted to e-money (or vice versa)

46. India - yes
Have had agent rules for a
long time (since 2006), but
restrictions were only lifted
over time
Kenya, Tanzania, Bangladesh - yes
Different rules for bank and nonbank
agents potentially leading to level
playing field issues
Uganda - no
Only for nonbanks (MFSPs),
but not permitted for banksMyanmar - yes
Mobile Banking Directive
permits agents, but lacks
clarity (e.g. on exclusivity,
tiered agent structure)
Basic enabler #2: Regulations permitting and governing the use
of agents by banks and nonbanks
51

47. What do we want to see and how do we get there?
Use of agents permitted
by range of relevant
providers
Provider liability clearly
stated
Preferably other relevant
elements clearly
prescribed
Appropriate
agent
regulations First step is to permit
agents (Uganda example
for what happens if not)
and to establish general
principal agent principles
Second step is to define
clear rules
Other relevant issues: (i)
exclusivity; (ii) level
playing field for different
types of agents; (iii)
tiered agent structure;
(iv) use of prefunded
accounts; etc.
Typical
steps
required to
get there
52

48. KYC Regulation
Bir Azam, 2013 CGAP Photo Contest 53

49. Responding to AML/CFT concerns
FSP ClientAgent
DFS
participant
Regulatory
environment
Prudential
regulation of banks
and e-money
issuers
1 Agent regulation2 KYC regulation3
Consumer
protection
regulation
4
54
Competition regulation

50. The Financial Access Task Force (FATF) stipulates that a
risk-based approach may be taken to KYC requirements
The regulation provides guidance at very high level,
leaving room for interpretation under local market
conditions
Countries and FI’s are required to “identify,
assess and understand their ML/TF risk”
1. “Identified Higher Risk”:
Enhanced measures must be applied (i.e. obtaining
additional information on customer (occupation,
volume of assets, source of funds, etc.) and more
frequent updates)
2. “Identified Lower Risk”: Countries may simplify
measures to be applied by FIs
3. “Proven Low Risk”: Countries may exempt FIs
from certain recommendations
Who determines the regulation? What does the regulation say?
The FATF is an Intergovernmental body
which develops international standards on
combating:
• Money laundering
• Terrorist financing, and
• Proliferation of weapons of mass
destruction
• Feb 2012: Issue of Revised Standards
• 40 Recommendations + Interpretive Notes
55

51. Source: Banxico Circular 2019/95 as modified by Circular 14/2011
Level 1 Level 2 Level 3
Level 4
Traditional bank
account
Max amount in
monthly
transactions
US$ 280 + max
balance of US$ 370
US$1,110 US$3,700 No limit
Customer
information
required to open
account
None
Basic Information
(Name, Address,
Gender)
Full customer information required
Documentation N.A. No paper copy required
Paper copy
required
Customer present at
opening
No
No
(but bank has the
option to request
it)
Yes Yes
Access point
Only debit card.
No mobile
Mobile, card, bank
transfer
Mobile, card, bank
transfers
The same plus
cheques
Tiered account structure
The example of Mexico
59

52. Using biometrically verified SIMs for account opening
The case of Pakistan
439 665
929 1,060
1,447
1,761
2,112
2,399 2,643
2,966
3,475
3,832
4,238
4,713
5,415
7,538
10,881
13,192
15,322
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Branchless Banking Accounts
(in thousands)

53. Basic enabler #3: Tiered, risk-based KYC structures
Pakistan - yes
Separate KYC rules for
branchless banking, while in
most other countries existing
rules for banks apply mutatis
mutandis
Bangladesh - yes
Central bank-issued rules vs.
general rules under AML Law: One
can be better at defining
proportionality than the other, but
AML Law generally prevails
India and Pakistan - yes
e-KYC allows customers to
open accounts at agents (and
in Pakistan even on the phone
with biometrically verified
SIMs)
Kenya - yes
Coverage of ID and
accessibility of database: if
good, even low risk accounts
can make use of official ID
and the need for alternative
forms of identification for low
risk accounts is less important
Rwanda - no
Not clear whether PSPs (and
thus EMIs) fall under definition
of “reporting entity” in the AML
Law
62

54. What do we want to see and how do we get there?
Simplified CDD for
low risk accounts
The extent to which
KYC/CDD is a
problem strongly
depends on the
quality of the ID
system
Biometric
verification of SIMs
can be a game
changer
Risk-based
KYC rules
Ideally the AML law
provides room for
simplified CDD
The question of
how simplification
will look like
strongly depends
on quality of ID
system
Pakistan as
example that pricing
can also play
important role
Typical
steps
required to
get there
63

55. GHANA’S AGENT GUIDELINES

56. Agent Guidelines
• Serves to regulate both banking agents as well as
agents of e-money issuers
• Requirement for central bank authorisation to
use agents with submission of ADD, AML, risk-
assessment and conflict resolution policies
• Specifies strict agent eligibility and due diligence
requirements
• Non-exclusivity of agents
• Strict adherence to consumer protection
regulations set forth in the EMI Guidelines

57. Agent Guidelines
Permissible Activities: E-Money
• Opening of Minimum and Medium KYC e-
money accounts on behalf of principals
• In addition, master-agents may open
Enhanced KYC e-money accounts
• Balance inquiry and provision of account
statements
• Cash-in and cash-out to/from the customer’s
own account

58. Agent Guidelines
Permissible Activities: E-Money
• Cash-out of direct transfers not received to an
account, including international remittances,
salaries, benefits, loan disbursements
• Funds transfers, domestic remittances,
• Inward international remittances
• Marketing of credit, savings and insurance
products offered and provided by licensed
financial institutions

59. Agent Guidelines
Permissible Activities: Banks
• All functions analogous to those under e-money,
except the opening of bank accounts
• Receipt, verification and forwarding of
applications for credit, savings, investment and
insurance products to principals
• Receipt and forwarding of applications for credit
cards and check books to principals
• Delivery of bank mail and check books to bank
customers

60. Threats
• Lack of reliable national personal identification
system
• System related fraud: Systems should be secure
and robust to prevent fraudulent access
• Agent related fraud: Some agents access
customer accounts while supporting them and
withdraw additional funds when not authorized
• Consumer related fraud: PIN secrecy rules are not
enforced and therefore relatives and agents get
access to consumer account and defraud them
• Cybercrime and Money Laundering

61. The Way Forward
• National strategy on financial inclusion to
address some payment related issues
• Build capacity, strengthen regulation &
supervision to check abuses
• Set up an agent registry to take stock of all
financial agents in Ghana
• Continuous and closer collaboration with
other regulators in the financial space
• Set up Payment System Council to continue to
drive payments ecosystem

62. Consumer protection
regulation in DFS
Sumon Yusuf, 2013 CGAP Photo Contest 71

63. Protecting consumers
FSP ClientAgent
DFS
participant
Regulatory
environment
Prudential
regulation of banks
and e-money
issuers
1 Agent regulation2 KYC regulation3
Consumer
protection
regulation
4
72
Competition regulation

64. Whose job is it to protect DFS customers?
Providers
Regulator
Customers
73

65. Responsible finance stakeholder survey Summer 2014
What level of responsibility do each of the following actors
have to mitigate consumer risks?
0 10 20 30 40 50 60 70
Consumer Advocates
Donors
International SSBs
Consumers
Regulators
Providers
Results from Pulse Survey Summer 2014
primary responsibility medium responsibility no responsibility
74

66. Seven Key Concerns of DFS Customers
1. Inability to transact due to
network/service downtime
2. Inability to transact due to
insufficient agent liquidity/float
3. Complex and confusing
user interface
Source: CGAP
76

67. Seven Key Concerns of DFS Customers
Cont’d.
4. Inadequate provider recourse
5. Lack of transparency
6. Fraud perpetrated on the customer
7. Inadequate data privacy and
protection
Source: FSD Kenya
77

68. Some insights from CGAP research:
Inconsistent disclosure practices
79

69. Recourse in Digital Finance: Emerging good
practices
 Opportunities: Increased consumer touch points and
choice; SMS transaction records and confirmations
 Good practices seen amongst DFS providers:
 Specialized DFS line and staff
 Specialized desks for common complaint types:
Reversals, lost SIM/PIN, non-payment products
 Dedicated agent hotline
 Training of agents on complaints handling and fraud
detection
 Enforcement of prominent display of hotline signage at
agent locations
82

70. Basic Enabler #4: Consumer protection rules considering specific
risks in DFS
What is special about
consumer protection in DFS?
Effectiveness of CP rules on fair
treatment, disclosure, redress in
practice?
Tanzania, Ghana, India,
Myanmar (no), and Pakistan
(yes)
A few lines in the relevant
regulations – is this enough?
Or do we need a dedicated
financial consumer protection
law?
Kenya
Relevance of other regulators
beyond financial regulator (in
particular Competition
Authority of Kenya)
Kenya, Tanzania
Digital credit as newly
emerging area
84

71. What do we want to see and how do we get there?
Consumer protection
rules specific to the
provision of digital
financial services
This could be part of
a broad FCP regime
or something specific
for agents / e-money
/ digital credit etc.
Appropriate
consumer
protection
regulation Broad authority in
law (increasingly
under stand-alone
FCP law)
Rules tailored to the
specific consumer
protection risks in
DFS
Typical
steps
required to
get there
85

72. Some lessons from BoG’s experience with introducing regulatory
changes
• Leadership important
• Market driven
• Partnership with private sector:
– Provides visibility
– Lends credibility and trust
– Raises understanding and cooperation and collaboration
– Ensures sustainability of innovations
• Incorporate incentives that create win-win situations
• Should cross-reference with existing and planned
laws
• Access without usage does not promote financial
inclusion  consumer education highlighting
benefits of electronic payments and transactions as
well as key consumer-related risks and how to
mitigate them
86

73. Some lessons from CGAP work on creating enabling
environment for DFS
• Takes time (often two steps forward, one step
back)
• Important to build
trust with regulators
and industry
• Requires good under-
standing of local
market
• Draw on deep
expertise and global
knowledge of basic
enablers
87

74. Advancing financial inclusion to improve the lives of the poor
www.cgap.org 88