Interoperability of retail DFS What is Interoperability? DFS - - PowerPoint PPT Presentation

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