Digital Financial Services Supervision in Bangladesh
Digital financial services (DFS) innovations can rapidly expand financial access and inclusion, but also pose risks related to fraud, market abuses, and financial stability. Regulatory frameworks thus need to strike a balance between fostering innovation, protecting consumers, and addressing the potential for unintended consequences of technological disruption. They must also ensure the market is a level-playing field for all service providers to participate in the sector.
With a vibrant DFS market and a progressive central bank, Bangladesh has much to share with the rest of the world. This case study delves into the evidence-based benefits and limitations of Bangladesh Bank’s approach to regulating and supervising innovations in the DFS market.