Digital financial services and risk management handbook
In conjunction with supporting the expansion of financial inclusion through digital financial services (DFS) it is important to ensure their sustainability and reliability via the implementation of effective and responsible risk management practices. The research for this handbook included three components, interviews with approximately 30 practitioners; four in depth case studies with Tigo Tanzania (mobile network operator (MNO) FINCA Democratic Republic of Congo (DRC) (microfinance institutions (MFI) Kopo Kopo Kenya (payment service provider (PSP) and Fidelity Bank in Ghana; and a two day client workshop held in Cape Town in November 2015. The authors found that although most providers have extended their existing risk frameworks to include alternative channels, there is only a nascent understanding of the additional risk that DFS bring. This is particularly pertinent as DFS deployments often mean that organizations engage in business activities outside of their core business, such as MNO offering financial services through mobile wallets, or banks and MFIs partnering with MNOs to offer traditional banking products through new channels. The focus is to describe the basic underlying principles of risk management for practitioners who are not risk specialists but are involved in the establishment and protection of a DFS business. This handbook serves as a practitioners guide to identifying, assessing, and mitigating risks specific to DFS.