Guide / Toolkit

Digital Financial Services and Risk Management Handbook

Comprehensive guide to the risks associated with implementation of digital financial services

Alongside the many opportunities provided by ground-breaking technology and innovative business operations also come new risks. The risks related to implementing digital financial services (DFS) extend far beyond operational and technical risks. In order for the financial inclusion industry to be able to capitalize fully on the benefits of digital financial services, it is important that the accompanying risks are understood and adequately addressed.

The research for this handbook included three components: interviews with approximately 30 practitioners, four in-depth case studies with Tigo Tanzania (MNO), FINCA DRC (MFI), Kopo Kopo Kenya (PSP) and Fidelity Bank in Ghana, and a two-day client workshop held in Cape Town in November 2015. The research objectives were to:  

  1. Clearly define and describe all types of risks that may be faced by financial service providers using digital financial services;
  2. Provide easy-to-use guidelines for conducting risk diagnostics, assessments, developing risk frameworks, and implementing risk management tools;
  3. Analyze how different types of financial institutions currently assess risk and implement risk management tools;
  4. Identify general lessons learned by financial service providers about DFS risk management that are relevant to other markets and organizations on such issues as integration with exiting institution-wide risk frameworks, key risk indicators, most common types of risks faced, how to best mitigate risk, and best practices for DFS risk management. 

About this Publication

By Lesley Denyes , Susie Lonie