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

ITU: a unique Membership 193 Member States and regulatory bodies 750+ companies Business associations International organizations NGOs 90+ Universities and Research 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 Lee TSB Director

ITU-T Study Groups SG2 Operational aspects SG3 Economic and policy issues SG5 Environment and climate change SG9 Broadband cable and TV SG11 Protocols and test specifications SG12 Performance, QoS and QoE SG13 Future networks & clould SG15 Transport, access and home SG16 Multimedia SG17 Security SG20 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 18

ITU-T Focus Group on Digital Financial Services (FG DFS) Duration: 2 years Open to all stakeholders 1st Meeting: Geneva, 5th December participants, 25 countries 2nd Meeting: Washington DC, 21st April participants, 23 countries 3rd Meeting: 30 Sept – 2 October 2015, Malaysia 4th Meeting: December, ITU, Geneva 14 December: Workshop on Digital Financial Services and Financial Inclusion

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

Stakeholders Better Than Cash Alliance

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.

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