Interoperability of retail DFS
• What is Interoperability? • DFS interoperability models • The essentials of interoperability • State of retail DFS interoperability in Malawi • Benefits of interoperability • Challenges of interoperability
▪ Interoperability is the ability of different digital systems to communicate, exchange data, and be able to use the information that has been exchanged. ▪ A technology driven exercise and environment using international standards GSMA definition … ▪ Interoperability is the increase in network size when digital financial service providers are interconnected to each other
Interoperability can be mandated or collaborative. The different models to achieve interoperability: 1. Bilateral integrations 2. Industry specific integrations 3. An all-inclusive central switch / hub 4. Regional integrations 5. International integrations
1. Technology 2. Standards 3. Technical specifications 3. Scheme rules 4. Risk mitigation 5. Stakeholders’ alignment; and sometimes 6. Laws, regulations, policies and directives; among other requirements
An all-inclusive central national switch that has created a digital ecosystem for retail digital financial systems; and that is open to all licenced digital financial service providers: ▪ Commercial banks ▪ Non-banks ▪ Fintechs ▪ Aggregators and Third Party Processors
Interoperability offers benefits to consumers and the DFS providers as well The main objective is to address financial inclusion for the poor and those that are underserved or excluded from financial services. The benefits also include: ◦ Affordability ◦ Convenience ◦ Accessibility ◦ Provides a platform for collaboration ◦ Stronger network effects and easier to acquire a critical mass ◦ Etc.
The challenges include: ◦ Stakeholder alignment ◦ The need for continuous investment ◦ Getting the industry to agree to a common standard ◦ Getting participants to agree to common scheme rules ◦ Commercial issues – especially pricing and fee sharing arrangements
THE END Q & A THANK YOU
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