Digital Financial Services

The COVID-19 pandemic has pushed digitalization and digitization across all industry sectors and blockchain is considered an innovative frontrunning technology with regards to applicability and usability in these challenging times. Blockchain technology has enabled access, through the process of tokenization, to assets that, until now, could not be traded quickly and easily. Tokenization is one of the cornerstones of Decentralized Finance (DeFi) and a native functionality of multiple blockchain architectures. The properties and features of a token unlocks a variety of economic possibilities, besides the main function of using it as fuel for the network itself. A basic definition of a token refers to a digital asset that is created, issued and managed on a Blockchain or Distributed Ledger Technology (DLT) infrastructure, and is designed to be highly secure with an instant transferability property. With the advancement of smart contracts, some built-in functionalities have been developed and programmed, which helped push the tokenization process to new heights. From real estate security tokens that represent fractionalized properties to platformspecific tokens that incentivize the use of a particular application, tokens have emerged as a secure and digital alternative for users across the world to access, trade and store value. The Content Creators and Art industry is going through a paradigm shift with the introduction of Non-Fungible Tokens (NFTs), as the space is acquiring a large number or artists hoping to capitalize on the innovation and distribution power that blockchain technology is offering. What digitization first removed from art, blockchain is trying to bring it back, reshaping the art world with viable tools for provenance, authenticity and distribution. In this paper we will assess the innovative approach of NFTs in different sectors, with an in-depth analysis of their usability and impact. We will be focusing on the features of NFTs to ensure scarcity, traceability and proof of ownership, amongst the most essential properties needed to create, store and maintain the value of an asset.

Technology is rapidly is changing the way we think about money. Digital payment has been slow to take off in the United States but is displacing cash in countries as diverse as China, Kenya, and Sweden. In Reimagining Money, Sibel Kusimba describes the rise of M-Pesa, and offers a rich portrait of how this technology changes the economic and social landscape, allowing users to create webs of relationships as they exchange, pool, borrow, lend, and share digital money in user-built networks. These networks, Kusimba argues, will shape the future of financial technologies and their impact on poverty, inclusion, and empowerment. She describes how urban and transnational migrants maintain a presence in rural areas through money gifts; how families use crowdfunding software to assemble donations for emergency medical care; and how new financial groups invest in real estate and fund weddings. The author presents fascinating accounts that challenge accepted wisdom by examining the notion of money as wealth-in-people-an idea long-cultivated in sub-Saharan Africa and now brought to bear on the digital age with homegrown financial

Financial services remain untapped by most of the small business owners in Bangladesh. This limited access to mobile financial services and FinTech presents a business opportunity for the FinTech startups in the market. TallyKhata and Upay are digital financial services platforms visualizing to capture the untapped sector by becoming one of the first movers in the industry. This article has studied the cases of TallyKhata and Upay in empowering small businesses in Bangladesh through the services that have made business transactions and credit management hassle-free.

Digital Transformation in the Financial Services Sector presentation featuring the global trends and EY analysis for banks interested in implementing digital innovations. The presentation was delivered at the CS Network Conference in Odessa in October 2019.

Digital Financial Services (DFS) is a relatively new, low-cost means of digital access to transactional financial services. Often termed 'mobile money' or 'mobile financial services,' DFS is one of the core solutions used in developing countries to catalyze financial inclusion and provide much-needed low-cost access to financial services. Aimed at those at the Bottom of the Pyramid (BOP) in developing countries, it shifts provision of financial services it uses digital access devices such as mobile phones and digital value transfer channels. It also features the emergence of agent networks for cash-handling and DFS account signups. DFS can be offered banks and non-banks-known as Digital Financial Service Providers (DFSPs)-who may be licensed or authorized by a range of regulators to provide these services, either on their own or in mandated partnerships. Core DFS regulators include the central bank, the financial intelligence unit and the national telecommunications authority. 'Enabling and proportional' regulatory regimes allow DFSPs to collect customer funds through agents operating on their behalf, convert those funds into electronic money (e-money) to be stored in customer stored value accounts (SVAs) that are used for primarily transactional purposes. While DFS has demonstrated novel responses and innovations from regulators and lawmakers to facilitate and supervise new market participants, often the regulatory innovations have been incremental or perfunctory, featuring some interesting carve-outs that often represent the local political economy, for example requiring formation of specific financial entity vehicles to provide DFS. Initial, foundational services include remittance and bill payments, but with limited interoperability between competing providers. There are signs however of a more integrated approach, where DFSPs integrate into a national payment system and the broader economy, while central banks themselves are building interoperable switches to catalyze this integration. Governments are increasing digital liquidity in DFS and hence driving DFS use by placing social payments into DFS SVAs. New forms of vendor platforms also facilitate these improvements. While some 690 million people in 91 countries actively use their DFS accounts, handicapping a more rapid evolution and adoption of DFS are strict anti-money laundering (AML) rules; poor identity document regimes in many countries that stifle account signups; and poor mobile coverage and lack of high speed mobile data coverage in rural areas that forces DFS customers there to use insecure and error prone text-based DFS user interfaces on their phones. All these factors appears to be the cause of a drop in account usage in some countries in favor of a dependency on agent-derived over-the-counter transactions. There is also a downstream effect on competition and the commercial viability of some DFSPs. This brief primer on DFS expands on these issues and demonstrates how technological, regulatory and commercial components interact to form the DFS ecosystem.

The fast-growing phenomenon of electronic banking (e-banking) has taken the world by surprise , and despite its proliferation across the globe, its acceptance has not been too encouraging, especially in the rural areas of the developing countries. This study revolves around this very key issue of e-banking acceptance in the rural areas of Pakistan by employing a comprehensive framework of Unified Theory of Acceptance and Use of Technology (UTAUT), called a unified model by Venkatesh, Morris, Davis, and Davis (2003). This paper extends the unified model through personality openness and investigates the moderation of trust between behavioral intentions and usage behavior. Using a survey-based questionnaire, data were collected from the customers of rural areas of Pakistan. The authors obtained 434 valid responses from universi-ties' students having a rural background and resultantly analyzed through structural equation modeling with Smart-PLS. Our results reveal that performance expectancy, social influence, and effort expectancy have significant and positive impact on behavioral intentions of rural customers in Pakistan. Moreover, we find that personality openness significantly shapes behav-ioral intentions and trust on the internet moderates between customers' intentions and their usage of e-banking. The study broadens the understanding of e-banking in rural areas which might help future researchers and regulators to know and enhance their policy formulation.

Starting its journey in 2011, mobile banking, commonly referred to as mobile financial services (MFS), has demonstrated phenomenal growth in Bangladesh. The MFS sector now has about 15 million registered users transacting over BDT 80 billion (US$ 1.0 billion) per month through over 500,000 agents. In 2013, the number of registered MFS users grew at about 12 per cent each month, with a CAGR of 266%. Meanwhile, cash transactions grew at a CAGR of 186%. In the month of March, the average daily money transaction amount through mobile banking reached unprecedented levels – registering over BDT 4.0 billion (US$ 51 million). According to Bangladesh Bank data, the total transactions for the month rose to BDT 123 billion.The remarkable development of MFS is better appreciated in the context of the country’s demographic/socioeconomic statistics: a potential market of 160 million people, median age of only 23 years, and per capita income of US$ 840 per annum. The key statistics, however, are a banked population of 20% (i.e., those that have access to formal banking services) and secondly, a mobile penetration of 75%. Thus, the availability of MFS has allowed the unbanked in Bangladesh to skip several stages of development of the banking sector, e.g., setting up of physical branches, and gradually enter the global community of the banked.

This paper aims to investigate and give some element of answers to what extent the Financial Technology (FinTech) industry could be such an opportunity to mitigate the financial issues faced during the COVID-19 outbreak, particularly, in the North African countries. In the aim to present a state of the art, prospective discussion, and outlook reading; this paper is established using a descriptive and deductive approach and based on recent data and updated research findings, global institutions blogs, reports, publications, evidence, policies, and statistics. Some highlights and focuses are given for leading countries in the region like Egypt, Morocco, and Tunisia, with brief attention to the Algerian case. Our findings show that banking institutions are the major access to financial resources and critical financial services for many customers and users in the region. Therefore, FinTech solutions are not yet matured and undefined in the future but are necessary for unbanked people. Further reforms in terms of regulations, technology adoption, cost use and access are still required.

The issuance of a Central Bank Digital Currency (CBDC) is a very important step towards a fully digital economic environment and the consequences of such a direction are under debate by many policymakers around the world. There is a clear interest within the space as governments around the world are exploring the viability of a digital currency and according to the latest Bank for International Settlements (2021) report: 86% of the world's central banks have begun to conceptualize and research the potential of CBDC, 60% are developing Proof-of-Concepts (PoC) and 14% are implementing pilot projects. This paper provides a comprehensive overview for finance and investment participants about the topic of Central Bank Digital Currencies. The recent international exploration into the future of Central Bank money is complex as it is interconnected with two equally dynamic entities: Digital Currencies and Blockchain/Distributed Ledger Technology.

Consumer protection and data privacy law and regulation face important challenges from big data and machine learning techniques, particularly where these are used for making decisions about services provided to consumers. Complying with requirements to notify the consumer as to the purpose of data collection is difficult where, as in machine learning, the purpose may not be known at time of notification. Consent is difficult to obtain when the complexity of big data and machine learning systems is beyond the consumer’s comprehension. The notion of data minimization (collecting and storing only data necessary for the purpose for which it was collected, storing it for the minimum period of time) runs counter to the modus operandi of the industry, which emphasizes maximizing the volumes of data collection over time. The successful functioning of machine learning models and the accuracy of their outputs depends on the quality of the input data. Data protection and privacy laws increasin...

This article examines the role of gender in the use of digital finance in Kenya, including the well-known case of mobile money but also the emerging use of smartphone apps, payment tills, digital credit services, and digital fund-raising computer programs. Development professionals have explicitly feminist goals in bringing digital finance to women in the Global South. In several recent reports, they outline the belief that gender norms are a barrier to women's use of finance. They hope digital finance will bring women agency and control over money and consequently shift restrictive gender norms. This article offers a critique of these assumptions based on ethnographic conversations, a diary exercise, and network self-portraiture conducted in Kenya in 2016 among both rural farmers and urbanites. Adopting a distributed agency perspective, the ethnographic study demonstrates that Kenyan women and men use digital finance not to seek individual control of their money but to produce themselves as connected and trustworthy members of financial groups and collectivities. Gender norms may not hinder women from finance but rather enhance and deepen women's and men's financial relationships and bring women success in amassing funds.

On April 19, 2018, the third Global Findex Database was released by the World Bank at the Bank’s Spring Meetings. According to CGAP, this dataset is “the financial inclusion community’s best demand-side measure of financial inclusion globally.” Launched with funding from the Bill & Melinda Gates Foundation, the Findex database now has three years of time series data available, for 2011, 2014, and 2017, which can tell a compelling tale on access to financial services over the past 6 years. Conducted in collaboration with Gallup Inc., the research consists of nationally representative surveys of more than 150,000 adults, age 15 and above, in over 140 countries. This article is based on the final dataset that is publicly available on the World Bank Group website. Overall, the dataset points to an increasingly inclusive financial world that is also transitioning to a digital economy. Bangladesh, too, made impressive gains in certain yardsticks for financial inclusion based on this dataset. For instance, the share of people with financial accounts increased from 29 percent to 41 percent, in three years. However, following a critical analysis, the author suggested all stakeholders involved in financial inclusion to prioritize the focus on the usage of accounts. It is only when people are actively using their accounts will we have meaningful financial inclusion, and the impact of ongoing efforts will be fully realized.

This paper, based on fieldwork in Western Kenya from 2012 to 2016, describes how life cycle rituals collect and distribute different forms of money, including land, property, personhood, animals, cash, and digital moneys. It specifically examines a ritual coming of age for adolescent boys. By organizing multiple forms of money relative to the phases of a human life, the past, and the future, these rituals serve to manage and transfer wealth across generations and to give these transfers social and moral dimensions. The study provokes a critique of financial initiatives in the Global South that often assume that the financial goals of the poor are short-term. Résumé: Basé sur des recherches de terrain dans l'ouest du Kenya de 2012 à 2016, cet article décrit comment des rites du cycle de vie sont mobilisés pour collecter et distribuer différentes formes d'objets de valeur, y compris la terre, la propriété, la personnalité, les animaux, l'argent comptant et l'argent numérique. Spécifiquement, nous examinons un rite de puberté pour des adolescents. En organisant plusieurs formes d'argent relatives aux phases d'une vie humaine, le passé et le futur, ces rites aident à gérer et transférer la richesse à travers les générations et donnent à ces transferts des dimensions sociales et morales. L'étude amène vers une critique des nouvelles initiatives financières introduites dans les pays du Sud qui souvent estiment que les objectifs des pauvres ne sont qu'à court terme.

Kenyans use mobile money services to transfer money to friends and relatives via mobile phone text messaging. Kenya's M-Pesa is one of the most successful examples of digital money for financial inclusion. This article uses social network analysis and ethnographic information to examine ties to and through women in 12 mobile money transfer networks of kin, drawn from field data collected in 2012, 2013, and 2014. The social networks are based on reciprocal and dense ties among siblings and parents, especially mothers. Men participate equally in social networks, but as brothers and mother's brothers more often than as fathers. The matrilineal ties of mobile money circulate value within the hearthhold (Ekejiuba 2005) of women, their children, and others connected to them. Using remittances, families negotiate investments in household farming or work, education, and migration. Money sending supports the diverse economic strategies, flexible kinship ties, and mobility of hearthholds. Gifts of e-money are said to express a natural love and caring among mothers and siblings and are often private and personal. Consequently, the money circulations of the hearthhold avoid disrupting widely shared ideals of patrilineal solidarity and household autonomy.

There are two forms of social protection in Kenya; the contributory scheme enforced under formal employment and non-contributory schemes which are financed by taxes. This paper focuses on the latter and specifically, tax-financed social assistance schemes in the form of digital cash transfers. The aim of these schemes is to address poverty and reduce vulnerability to economic, social, natural and other shocks and stresses amongst the marginalised by providing them with regular cash flows. While these social assistance schemes have been critical in improving the lives of the most vulnerable in Kenya-majority of whom are excluded from the contributory schemes that are suited for those in formal employment-none of them is large enough to adequately address the numbers of people in need. Moreover, they continue to face policy, administrative, programmatic as well as evidence-related/knowledge challenges that impair their efficiency and effectiveness. Therefore, a need arises to assess these tax-financed cash transfer schemes to better understand and present an accurate reflection of the current state of affairs. In so doing, this paper provides recommendations for Kenya's tax-financed social benefits schemes in order to improve coverage, address poverty and reduce vulnerability.

The Government of India is regularly supporting and embracing the technological advancements necessary to promote digital inclusion among masses. New technologies such as Artificial Intelligence, Machine Learning, Biometric Identification and Blockchain technology brought new financial technologies namely Unified Payment Interface Services, Immediate Payment System and Mobile Banking/Wallet Services into existence. As a result of the revolutionary development of FinTech, Digital Finance Companies and Digital Financial Services, various new digital products emerged and became popular among masses because of their convenient, speedy, simple, and user-friendly functions. This article focuses on FinTech, Digital Finance, Digital Payments, and their role in Digital Financial Inclusion in India.

Digital Financial Services (DFS) is a relatively recent mobile-centric financial inclusion innovation in developing countries. Using ubiquitous mobile phones as the means of service access, DFS provides the unbanked and underserved-many of whom live in rural areas-with access to basic financial services provided by banks and non-banks such as mobile network operators and third party DFS providers (DFSPs). With mobile phones as the primary access mechanism for services, access to DFS is highly dependent upon the degree and quality of mobile coverage offered by mobile network operators (MNOs). User interfaces (UIs) for access to DFS are mostly dependent on the type of mobile coverage available which in many cases in the developing world is via slower (narrowband) second generation (2G) GSM technology. Faster broadband third (3G) and fourth generation (4G) mobile coverage is available in most developing world countries, but is mostly limited to urban and peri-urban areas and along national road corridors. Our study finds that the type of mobile coverage provided has a significant effect on the DFS UI and type of mobile phone that can be used for DFS access. Feature phones and Unstructured Supplementary Service Data (USSD) transactions continue to be the choice for the vast majority of (mobile money) users. Faster mobile broadband technologies are optimal for smartphone use-or hybrid smartphones in feature phone format-which can provide superior and more intuitive graphical user interfaces. Indeed, the primacy of 2G coverage in developing countries where DFS is prevalent forces DFS customers to use non-intuitive, coverage-sensitive, text-based UIs-particularly USSD-and also STK on only 2G-centric basic and feature phones (or its limited, near equivalent on smartphones.) These UIs and resultant user experiences (UX) are sensitive though to the quality of the mobile coverage and signal, and limit the suite of potential services than can be provided to customers to primarily basic transactional 'DFS 1.0' type of services. Inconsistent coverage also forces users to have SIM cards and prepaid accounts for all MNOs they anticipate can provide service at particular locations. Frontline signup and cash handling services are mostly provided by agents who are similarly dependent on availability of mobile coverage of adequate quality. Use of smartphone-type applications using a graphical menu system can provide a more intuitive UI/UX and well as being more capable of offering a larger suite of services that including easier credit provision and information as well as agent rating and liquidity mapping, but the ability to properly use them is highly dependent on the availability and quality of broadband coverage signals. We find that the lack of broadband coverage-and fallback dependency on coverage-sensitive 2G-based UIs for DFS provision (primarily via USSD)-handicaps progress to more comprehensive service offerings as well as creating potential competition bottlenecks and system security risks in DFS provision. We define the evolution of DFS offerings as from DFS 1.0 o DFS 4.0, with DFS 1.0 being foundation, basic services such as including simple person-to-person (P2P) value transfers. The net result is that rural residents, for the most part, will have to make do with the foundational DFS services because of their reliance on 2G-based coverage and thus UIs.

There are challenges to digitisation usage. People are reluctant to use digital solutions due to their own limitations and sometimes because there exists distrust in what is intangible. Thus the policy thrust should be more on finding solutions for optimum usage of the existing platforms rather than introducing newer ones.

La exclusión financiera es un fenómeno que genera múltiples perjuicios, tanto a nivel individual como para el conjunto de la economía. Para luchar contra esta realidad y promover la inclusión, la Unión Europea ha configurado un derecho a acceder a ciertos servicios financieros a través de las cuentas de pago básicas. Esta herramienta se ampararía en la calificación de algunos servicios financieros como servicios de interés económico general y en la consiguiente imposición de obligaciones de servicio público. Mediante esta técnica de intervención, aunque con ciertos límites, podrían configurarse nuevos derechos de acceso a los servicios financieros, como los vinculados con el ahorro, los relacionados con el acceso a servicios financieros en cualquier parte del territorio, o los vinculados con la exclusión digital.

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Financial exclusion is a phenomenon that generates multiple damages, both at the individual level and for the economy as a whole. To fight against this reality, and to promote inclusion, the European Union has shaped a right to access to certain financial services, which operates through payment accounts with basic features. This tool is based on the classification of certain financial services as services of general economic interest and on the consequent imposition of public service obligations. Through this technique, although with certain limits, new rights to access to financial services could be configured, such as those linked to savings, those related to access to financial services in any part of the territory, or those associated with digital exclusión.

How CFOs can leverage disruptive technologies to achieve new levels of efficiency, agility, and value J U L Y 2 0 1 9 ¹ "Crunch time V: Finance 2025 (our predictions)," Deloitte, 2018, https://www2.deloitte.com/content/dam/ Deloitte/us/Documents/finance-transformation/us-ft-crunch-time-V-finance-2025.pdf.

The Government of India is regularly supporting and embracing the technological advancements necessary to promote digital inclusion among masses. New technologies such as Artificial Intelligence, Machine Learning, Biometric Identification and Blockchain technology brought new financial technologies namely Unified Payment Interface Services, Immediate Payment System and Mobile Banking/Wallet Services into existence. As a result of the revolutionary development of FinTech, Digital Finance Companies and Digital Financial Services, various new digital products emerged and became popular among masses because of their convenient, speedy, simple, and user-friendly functions. This article focuses on FinTech, Digital Finance, Digital Payments, and their role in Digital Financial Inclusion in India.

On April 19, 2018, the third Global Findex Database was released by the World Bank at the Bank’s Spring Meetings. According to CGAP, this dataset is “the financial inclusion community’s best demand-side measure of financial inclusion globally.” Overall, the dataset points to an increasingly inclusive financial world that is also transitioning to a digital economy. Bangladesh, too, made impressive gains in certain yardsticks for financial inclusion based on this dataset. For instance, the share of people with financial accounts increased from 29 percent to 41 percent, in three years. However, financial inclusion yardsticks should go beyond opening of bank and financial accounts and also encompass usage of accounts. It is only when people are actively using their accounts will we have meaningful financial inclusion.

Zimbabwe was once the breadbasket of Africa, we exported
anything and everything, from grain to textiles,
to the rest of the continent and beyond. Our industries
were arguably the best in the region, producing quality
products. Who would think of importing clothes
when we had barons, Topman and Avant? Almost all
manufacturing companies were up to standard. No
beef compared to our beef.
Those were the Glory days we need to reclaim them.

There is consensus that the poor (those living on less than $2.50 per day) need the same kind of financial services as their more affluent counterparts, albeit in smaller affordable units. What is not clear – especially in markets where formal financial exclusion is high and innovation is low – is whether financial institutions can design pro-poor financial products. After all, this is an area where they have not done so well for the so-called rich, despite years of experience. East Africa is such a market. In Uganda, where Grameen Foundation's Applab Money Accelerator is located, financial institutions continue to offer savings products for which the interest earned by the customer is much lower than the rate of inflation. This is something that the average " financially included " savings account holder has become accustomed to, and financial institutions have always found a reasonable way to justify it such as a low bank rate as well as high operational costs. Though such explanations may be acceptable to the economically schooled, they seem to defy logic when it comes to explaining them to the less schooled. How do you explain to a farmer who sells a goat and keeps the money in a bank account that he will not be able to buy back the same goat using those savings if they are kept in a formal account for a one-year period? If the interest paid on savings accounts can't keep up with inflation, why would a farmer who can save by keeping a portion of his maize harvest in his hut opt for a formal savings account? Does the formal systems value proposition for savings accounts today match the informal systems used by the unbanked?

This report is based on an evaluation of the impact of SMC’s pilot transition to digital financial services (DFS) under a grant provided by FHI 360 through the USAID mSTAR project. The evaluation used a pseudo-random sample of respondents across SMC’s different beneficiary groups, and included an instrumental mix of qualitative and quantitative methods of inquiry.

During the ten-month pilot period, SMC and its staff made a total of BDT 95,179,014 (approximately USD $1.2 million) in transactions using DFS, including both mobile and other electronic channels. Of that total, slightly more than three-quarters were for sales collections, while the remainder were for training payments.

Overall, the evaluation found that the transition to DFS resulted in increased efficiencies for administrative tasks by considerably lowering time spent when compared against the baseline data collected at the start of this pilot.