Digital Finance | Emerging Trends | ITU-T Standards | Standards
July 12, 2019

Here’s what ITU is doing to build trust in digital financial services

By Malcolm Johnson, ITU Deputy Secretary-General

*The following is adapted from remarks delivered at an event organised by the UN Secretary-General’s Task Force on Digital Financing of the Sustainable Development Goals (SDGs) during the United Nations High-Level Political Forum 2019 in New York.

For people to be persuaded to take up digital financial services they must have trust in them.

Trust will only come with security, and authenticity, so people are confident that they are transacting with the right entity. And there must be a high quality of service, at an affordable price.

Over the last two years ITU has been developing the international standards to meet these requirements.

To do so, we have relied on our diverse membership of not only our 193 Member States, but especially our private sector membership of some 600 companies — telecommunication companies as well as Internet companies and others — and, in addition, telecom regulators, academia and civil society.

Bringing the key players together

For standards on digital financial services, however, we needed the participation of the financial sector players: financial regulators; digital financial service providers, payment platforms, FinTech innovators, and central banks.

So, we formed a partnership with the World Bank Group and the Committee on Payments and Market Infrastructure, with the support of the Bill and Melinda Gates Foundation, to attract all these various stakeholders to the work.

Some of the institutions and central banks that participated included: the Bank for International Settlements (BIS), the European Central Bank, IMF, Bank of Canada, Central Bank of Philippines, Bank of Tanzania, Bank of Burundi, Egypt Central Bank, People Bank of China, Central Bank of Brazil, Riks Bank (Sweden), Central Bank of Norway, US Federal Reserve, Central Bank of Malaysia, New Development Bank (BRICS countries), Cornell University, Stanford University, NTRA, CENFRI, R3, eCurrency and Everitoken.

The Financial Inclusion Global Initiative

We call this partnership the “Financial Inclusion Global Initiative” (FIGI).

FIGI consists of three main components:

  • Country implementation of standards for Payment Aspects of Financial Inclusion (PAFI) and the enabling policy and regulatory framework.
  • An annual FIGI Symposium; and
  • Three working groups on: 1) Digital Identity, 2) Electronic Payments Acceptance, and 3) Security, Infrastructure and Trust

Standards have been, or are being, developed to address security, regulatory implications, consumer protection, fraud prevention and counterfeiting, the security of distributed ledger technologies (e.g. blockchain), cybersecurity, digital identity and identity management, principles for ethical use of data in big data analytics and artificial intelligence, standardization of mobile payment services using QR code, enhanced authentication in telebiometric environments using anti-spoofing detection mechanisms, as well as the use of telecom data for financial inclusion purposes.

New partnership with Stanford University

ITU has also launched with Stanford University a new partnership to support pilot implementations of Digital Fiat Currency (DFC) with the  Bank for International Settlements (BIS) and International Monetary Fund (IMF) support.

The first edition of the FIGI Symposium was held in India in 2017. The second edition of was held in January 2019 in Egypt and saw the participation of some 308 participants from the DFS ecosystem from 69 countries. The next edition is planned for 2-5 June 2020 in Brazil.

ITU has also developed:

  • an SDG Digital Investment Framework: as an analytical guide to digital investment identifying reusable ICT building blocks to deliver priority SDG use cases. The framework builds on a whole-of-government approach to ICT investment;
  • and a Best Practice Guidelines and a Digital Identity Roadmap providing a step-by-step guide through existing options to successfully implement an interoperable, scalable, and cost-effective platform for national digital identification.

I believe all this work is very relevant to the issues that are being discussed in the UN Secretary General’s Task force on Digital Financing of the SDGs and we would be happy to share it with the Task Force.

But of course, the essential requirement is connectivity, and as we know almost half the world’s population is still not using the Internet. Partly, this is because they live outside coverage area, and partly it is due to lack of awareness, lack of digital skills or it is just not affordable.

The good news is that there are some exciting innovations coming along which ITU’s World Radiocommunication Conference (WRC-19) later this year in Egypt is set to allocate spectrum for, namely: low-earth orbiting satellite networks and high-altitude platforms.

Both innovations have the potential to provide coverage of the hard-to-reach rural and remote areas at an affordable price.

These developments and innovations will surely mean that all people, everywhere will soon be able to benefit from these technologies and participate fully in the digital economy.

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Here's what ITU is doing to build trust in digital financial services

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