ໂດຍ: ວິສອນ ໄຊສົງຄາມ ກົມຄຸ້ມຄອງສະຖາບັນການເງິນ, ທະນາຄານແຫ່ງ ສປປ ລາວ ຄວາມຄືບໜ້າຂອງທະນາຄານແຫ່ງ ສ.ປ.ປ ລາວ ໃນການພິຈາລະນາຄໍາຮ້ອງເປີດໂຄງການທົດລອງ ໂດຍ: ວິສອນ ໄຊສົງຄາມ ກົມຄຸ້ມຄອງສະຖາບັນການເງິນ, ທະນາຄານແຫ່ງ ສປປ ລາວ This will be a high level overview of the BoL status and approach to reviewing applications for DFS pilots There are more steps to the process and more details - though this is the overview.

Agenda Status of DFS Pilot Applications What is the Review and Approval Process? How does BoL Review Pilot Applications for DFS? What are the BoL focus areas during review? Status - will explain How do we review?

Status of DFS Applications One Application has been received from BCEL Concluded a 3-day UNCDF workshop with multiple objectives: Develop and define a process to be applied to all future applications Identify and work with the committee who will review applications Review the BCEL application within the process Other applications are expected in the near term “BCEL will be able to launch their pilot on their schedule and their official approval should be provided to their management soon” Please confirm how you would like to disclose this…

The Review Committee Consists of individuals from the following: Financial Institution Supervision Department Regulatory Department Information Technology Department Banking Operations Department Ministry of Posts and Telecommunication

Basic Process for Pilot Application Review Application Submitted Eligibility Documents Agent Operations Risk Matrix Operational Readiness 5-Year Business Case Committee Reviews Application Guidelines Regulations Overall Criteria On-Site Meeting with Provider Understand specifics of operational readiness Seek clarification of application in areas of concern Decision on Application Approval Granted Conditional Approval Rejection First let’s look at the basic process of how we review the applications This process has been agreed to internally and is a guideline for how we will look at all applications The Top Level is the Item submitted - the lower level is the documentation required or the specific information which is reviewed or outcome 1) The Application is submitted - we have released guidelines for this in December 2014 - so any entity can submit an application with the documentation required 2) Within 10 days the Committee will attempt to meet to review a qualified application – and in consideration of the appropriate laws, regulations and guidelines and criteria 3) Within 10 days we will request a meeting with the Provider to meet them on site to discuss and learn more about their plans 4) Within 10 days we will hope to issue an approval - or a conditional approval - or Rejection If rejected - there is a process for resubmitting Timeframe 10 Days 5

Evaluation Criteria Focus Areas Eligibility Documents Customer Protection Appropriate Technology Agent Management Operational Support In addition to the required documents to establish eligibility we look at the other specific areas

Customer Protection Is there a defined customer service system, including: Customer Service Centre - well publicised phone number Trained teams to handle complaints and questions Complaint tracking system; with reporting Defined resolution hierarchy and management What is the plan to educate customers about the proper use of services and dispute resolution? What process has the applicant put in place for the security of customers? What process exists for dormant, unused accounts – or in the case of a deceased customer? Customer protection is important so we look at the following areas… and others…

Appropriate Technology The evaluation does not include a technology audit - but still must satisfy these concerns: Does the technology support new delivery channels that are likely to lead to mass adoption? Is the product easy to use by customers and Agents while still being secure and scalable? Does it support the reporting required by BoL as well as the internal reporting required to run the business? Platform Controls Fraud Detection Controls Internal Audit procedure and Business Continuity Planning Other Safeguards to ensure data privacy and confidentiality Is it able, directly or indirectly, to integrate to the National Payments System (NPS)? These are just a few of the technology concerns that we are looking at

Agent Management Does the applicant have appropriate human resources to monitor and supervise Agents – centrally and in the field? Does the applicant have a proposed agent selection criteria and selection process including recruiting, assessment, on-boarding, servicing and monitoring? What is the training plan and schedule for Agents? Agent compliance plans including any incentives or penalties that will be imposed for non-compliance. The proposed model for managing the liquidity at agent premises on continuous and regular basis. Distance of the agent premises from the nearest bank branch, service unit or other alternative.

Operational Readiness In addition to the eligibility documents and reputation of the company - is it operationally ready to undertake the project? Does it have and maintain the required internal controls to run this business? Is there a team in place, including a compliance officer? Are there clear AML/CFT policies in place, including managerial oversight, staff training, and reporting? Are transactional Limits and KYC requirements in place? Is role-based access defined for access to services and are there a clear segregation of duties for the back-office when conducting financial transactions?

On-Site Meeting It is important for BoL to have a close understanding of the operational working of these new services - and also to have visibility to any risks. BoL meets with each qualified applicant to discuss and understand their intended services and products. This is useful to hear from the managers and team members who are responsible for the new project. In some cases we will be able to see a demonstration of the services, technology, and process.

Outcomes of the Process Approval In principle approval for launching the pilot – All BoL conditions are fulfilled including a demonstration of technology. Conditional Approval In principle approval but with conditions – Some of the conditions need further clarification technology testing; customer service set-up; training system. N0-Approval No to an application depends on not fulfilling on most of the criteria. Application can be resubmitted after a 30-day period if criteria have been met.

Process After Pilot Approval Application Approved Certain Conditions may be highlighted or reinforced Launch of Pilot Within 6 months of Approval Should run for minimum of 6 months Monthly Reporting as specified by BoL Mid-Term Review Review to include on-site discussion Field Visit to Agents Extension and Expansion Duration Scope (Products or Services) Scale (Additional Agents or New Locations) Once the application is received , reviewed and approved then it is time to get started! Most providers will still need some time - we want them to be ready and launch within 6 months. The Mid-term review is required to review how the pilot has evolved and grown. Process should be more developed, gaps should be closed, and the delivery of service should become more reliable. 6 Months 3-6 Months > 30 days after mid term

Thank You Questions?