ITU-T Focus Group on Digital Financial Services

1st Athens Digital Payments Summit Athens, Greece

30 September 2015

Hiroshi Ota,Study Group Advisor, ITU

Overview of ITU

ITU: UN Agency for ICTs

ITU : enabling communication since 1865

1865 2015

4

ITU: a unique Membership

193 Member States and regulatory bodies

750+ companies

Business associations

International organizations

NGOs

90+ Universities andResearch Establishments

ITU’s 3 Sectors: Standards, Radiocommunications and Development

ITU-T Standardization

ITU-D Development

ITU-R Radiocommunication

ITU-T

• The Study Groups of ITU-T assemble experts from around the world to develop international standards known as ITU-T Recommendations

• Standards are critical to the interoperability of ICTs and whether we exchange voice, video or data messages

• Standards reduce costs

ITU-T’s strategic goals

To develop interoperable, non-discriminatory international standards (ITU-T Recommendations)

To assist in bridging the standardization gap between developed and developing countries

To extend and facilitate international cooperation among international, regional and national standardization bodies

Chaesub LeeTSB Director

ITU-T Study Groups

SG2 Operational aspectsSG3 Economic and policy issuesSG5 Environment and climate changeSG9 Broadband cable and TVSG11 Protocols and test specificationsSG12 Performance, QoS and QoE SG13 Future networks & clouldSG15 Transport, access and homeSG16 MultimediaSG17 SecuritySG20 IoT and applications, smart cities New!

ITU-D

• To foster international cooperation and solidarity in the delivery of technical assistance and in the creation, development and improvement of telecommunication/ICT equipment and networks in developing countries

• To facilitate and enhance telecommunication/ICT development by offering, organizing and coordinating technical cooperation and assistance activities

ITU-R

• Plays a vital role in the global management of the radio-frequency spectrum and satellite orbits – Limited natural resources which are increasingly in

demand from a large and growing number of services • Its mission is to ensure the rational, equitable,

efficient and economical use of the radio-frequency spectrum by all radiocommunication services

Digital Financial Services

MOBILE BANKING Banking services delivered through a mobile phone. Need a bank

account.

Digital Financial Services The use of ICTs and non-bank retail channels to extend the delivery of

financial services to unbanked.

• Bank account not needed.

• Use of agents for cash in and cash out.

• Use mobile handsets and other digital means for transactions

Mobile Banking v/s Mobile Money

Digital Financial Services and Financial Inclusion

1.6 billion have a mobile phone

Source: FINDEX 2014

Stakeholder Alignment

Regulators

Mobile Money Service

Providers

Consumers ?

SERVICE PROVIDERS (commercial viability): High volume of low margin

transactions For MNOs: increasing average

revenue per customer, reducing customer churn

For banks: expanding the customer base to low and middle income segments

REGULATORS : Mitigating systemic risk Protecting the consumer Promoting financial

inclusion

Successful Deployment

• Interoperability• Technology impact on ecosystem• Regulatory Dialogue• Consumer Risks• Security Issues• User Friendliness

Critical Success Factors

ITU-T Focus Group on Digital Financial Services (FG DFS)

ITU-T Focus Groups (FG)

• Quick development of specifications in chosen areas

• Addressing industry needs• Participation is open

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ITU-T Focus Group on Digital Financial Services (FG DFS)

• Duration: 2 years• Open to all stakeholders• 1st Meeting: Geneva, 5th December 2014.

• 97 participants, 25 countries• 2nd Meeting: Washington DC, 21st April 2015.

• 78 participants, 23 countries• 3rd Meeting: 30 Sept – 2 October 2015, Malaysia• 4th Meeting:

• 15-17 December, ITU, Geneva• 14 December: Workshop on Digital Financial Services and

Financial Inclusion www.itu.int/en/ITU-T/focusgroups/dfs/

Stakeholders

• International Organizations• Central Banks • Telecom Regulators• Mobile Money Operators • Payment Service Providers• DFS Platform Providers• Standards Development Bodies

Stakeholders

Better Than CashAlliance

GOAL: Recommend a standardization roadmap for interoperable digital financial services for financial inclusion.

Objectives

Identify the technology trends in digital financial services

Describe the ecosystem for digital financial services.

Identify successful use cases for implementation of secure digital financial services.

Study the best practices related to policies, regulatory frameworks, consumer and fraud protection, business models and ecosystems for digital financial services.

Suggest new work items for ITU-T Study Groups

ITU-T FG DFS

Four Working Groups Have Been Established to Lead the Focus Group’s Efforts

Main areas of work

Interoperability

Consumer Experience &

Protection

Technology, Innovation & Competition

DFS Ecosystem

ITU-T FG DFS

Working Group Tasks• DFS Ecosystem

– Obtain, review and leverage existing documents on global digital financial service specifications, standards, guidelines (including SG2 in TSAG-TD 158), etc. Some 65 documents related to DFS have been reviewed

– Describe definitions of terminology and taxonomy for digital financial services– Describe the ecosystem for digital financial services in developed and developing countries and the

respective roles and responsibilities of the stakeholders in the ecosystem– Identify key elements of the ecosystem necessary for financial inclusion – Establish liaisons and relationships with other working groups; determine need for future ITU-T

actions

• Interoperability

– develop a working definition of interoperability for digital financial services, – undertake stocktaking of successful / unsuccessful initiatives for interoperability, – develop a descriptive paper (which will include amongst others; a definition of interoperability, use

cases, and discuss the layers and dimensions of interoperability identified by the working group) and – develop a toolkit for interoperability.

Working Group Tasks• Technology, Innovation and Competition

– Six workstreams have been established• Review of DFS Platforms • Collect handset specifications in use in developing markets • Collect handset types in use in developing markets • Security for DFS• Big data• Competition Issues

• Consumer Experience and Protection

– Develop guidelines for consumer protection for DFS– Develop guidelines for quality of service in DFS.

THANK YOU

www.itu.int/en/ITU-T/focusgroups/dfs/.