 Digital financial services, known to many as mobile money, will be receiving increasing attention at ITU over the course of 2015. Our work is led by an ITU focus group chaired by the Bill and Melinda Gates Foundation. Its aim is to fast-track the use of these services to increase financial inclusion. Today almost everyone has access to a mobile phone, but there are some 2.5 billion adults worldwide without access to a bank account. Digital financial services have the potential to bridge this gap, but their use and impact have yet to achieve significant scale. I spoke with some of the ITU focus group's participants to learn more about the issues at play and what the group hopes to achieve. So access to financial services is important and there is increasing evidence that is really increasing welfare if it's properly done. But these services are not available just because this segment of the population, the poor, they transact in small value. So they transact a lot, but it's really very, very small value. So for the brick-and-mortar tradition of financial institutions it's becoming very, very difficult to think about a business model that could be profitable for them. And the use of the information and communication technology, the use of mobile technologies and mobile devices through which you can pay bills or you can transfer money from one person to another person domestically or internationally is the first step to then bring these people more closely to financial services. With the objective of course not to allow them to just transfer money because the simple transfer of money and the simple payment is not being financially included. But really as a first step on a ladder if you want, where at some point they will be eligible and they will have access to small credits, small insurance and small savings. The modern financial system is not working for the poor, in particular not for the unbanked, those without a bank account. That of course applies in particular to those poor people from developing countries, but let's not forget there are also poor people without bank accounts even in developed nations. But there is an alternative on-site and that is digital and financial services. It's the answer both because it provides potential to reduce the cost of tiny transactions dramatically and it also provides means of transacting potentially that meets the needs of poor people who have uneven income, uneven expenses, unpredictable income and unpredictable expenses and digital offers them a way to transact in the tiny amounts that they have available and potentially to have access to a full range of financial services to serve their needs. I think it's important that we have a group specifically looking at this sector. It's an area that we overlooked. The government thought someone else was doing the ITU thought someone else was doing but in fact nobody was doing it probably. So the time has come that this group to look at it and see what are the implications. How do we increase financial inclusion? What are the imperatives? What are the rules and the frameworks that cover this? I think that's why it's important. First of all, Russia is a huge country. We have a lot of people who live in remote area, who live in small settlements, towns, villages with no access to banking offices just because there is no bank offices. They can get some services through Russian post, through microfinance organizations but still they need more. They need transparent transactions and here digital financial services is something that can help because almost everyone have mobile phone, not really smart phone but mobile phone is enough to do basic transactions. I think it's great that the more affluent countries are recognizing as I mentioned increasingly that they also have issues with financial exclusion and particularly in certain market segments and are learning lessons from the emerging markets and developing countries. So we thought that it was really the time to think about a broader community of regulators and how these regulators talk to each other, how they communicate and how they collaborate to find the right solution for the market to develop. So the roles and responsibilities are not that clear and in our perspective more clarity can help the market because instead of having opacity and ambiguity that can lead to arbitrage and inefficiency in the market, having a clear understanding of who is doing what and what are the roles and responsibilities for each is creating a better ecosystem and a better environment for the industry for the regulators, a better understanding of the risk and hopefully a better provision and supply of services for the poor which is our target in the end. Thus far the conversation has been among financial sector regulators and financial sector standard setting bodies and the exciting development with the formation of the focus group is to bridge what is an important to bridge gap between the telecommunications sphere and the financial sector sphere which is already being bridged by necessity by policy makers at the country level but this is really the first opportunity we have to bring that conversation to a global level. One thing we realized that for the success of this service both the ICT regulator and the financial regulator must work together and that where there were overlaps in responsibilities then we needed to come together and see how we can be able to collaborate in order to be able to make the service a success. And we think that the unique benefit of the ITU focus group is indeed that it brings together the private sector and the public sector it brings together the financial sector as well as the telecommunications sector and really it brings together also developing and developed countries and we think based on this kind of unique setting we will also be able to look at this kind of new hybrid developments in the feet of payment services which are of very importance to achieve the target to have transaction accounts for all in order to allow people to safely and efficiently send and receive payments and also to store safely money. And I think it's important to highlight and stress the financial inclusion element of this activity because we are not there to really develop a digital financial services market per se we are really trying to understand what kind of solutions could be developed or discussed and reaching consensus amongst different players to provide market participants but also policymakers with new tools that could help them advancing the financial inclusion agenda locally. We need to collaborate with industry, with ITU, with the telecommunication with all these other industries and without that this will not work and we don't want it to fail because really a lot of things depend on this. It's now almost indispensable in other words using mobile phone or mobile facilities for financial services I don't think we can go back. A lot of people now rely on this. It's not secret anymore. The whole Somali economy is virtualized. It's very clear when we look to the roadmap for this project we see that in some matters the central bank leads because it's financial risks in some matters the telecommunication minister leads because it's technological and informational risk and in some matters we join our efforts. Again we have to recognize how to work on this together because for example Russian central bank or other financial authorities all over the world they pay attention and regulate financial risks but they do not regulate risks of technological issues they do not regulate for example hacking risks in mobile world and here is a huge potential for cooperation. We need each other. Financial authorities need or need telco authorities to work on this together. This convening power of the ITU I think is a great advantage and in addition of course whenever ICT is involved you would like to benefit from the knowledge of the experts active in the ICT industry so of course ITU has a large big expertise in this topic which can then contribute in solving the various challenges for digital financial services. If we kind of establish together with standard setting bodies in the feet of remittances it was the committee on payment and market infrastructures if we establish general principles if these principles are then adopted by governments and endorsed also by market participants that this can really contribute and increase the benefit and efficiency for the individual customer. When the service matures the need for regulations and policy direction becomes very important but I think at the start had we put that in place it could have been a big hindrance towards the rabid growth of the service. In some countries it does hinder and it's interesting point to elaborate you see one reason that mobile money worked better in developing countries might actually explain what's going on in other words if you look at Australia or the US for some reason mobile money didn't take off for example as fast as in Kenya or in Somalia and the reason is because the rules are rules they're very rigid and they're very formalized and the parliament and the governments want to know what's going on whereby in developing countries the technology just took off there was a need for money and liquidity in the economy and people just said how do you do it if it's by mobile let's just do it let the governments and the politicians catch up when they wake up when they which they did ultimately and now we have to legislate literally working backwards. We have few challenges one of them is probably unique to Somalia this is the violence and the terrorism and so on which is diminishing I guess started young kids are now no longer powerful and they're marginalized but on the other hand there's another problem that we share with the rest of the world which is how do we create the necessary legal framework to manage two industries that somehow got converged you have the telecommunications sector and the finance sector and all of a sudden now we have those two becoming one where you can do your voice and data as the old way of using mobiles as well as using that for financial services now the question is the politicians and the governments must move fast enough to come up with the necessary legislations to rule this area to actually say how do we manage this how do we govern this we have come up with a method of trying to ensure a tight kind of regulations that would enable those who access the service to have been properly identified and registered so that whatever SIM card that is being used in the transaction of this service must be with somebody who has been properly identified who is within the government registration system of course those who come into Kenya from foreign countries and want to use the service within the country of course we use their passports and we identify them with their passports as one of the key component in the identification process so this has helped to reduce but even after saying that the aspect of and mandel-launtering well is a very wide subject and I don't think we could easily be able to say we have eliminated it there are also technical challenges for example suppose you are subscribed to an operator in your country but you would like to send money to someone who is subscribed to another operator so how do you ensure interability or going even a step further suppose you have someone working in a country outside your country and the person would like to send money to his or her family is that possible using mobile devices so these are also some of the technological questions we are still trying to figure out where we will end up but I am optimist the way forward is through technology not just because I am a technology self involved in the industry but I can see already the light I can see where we are going with this so with a small footprint with governments doing as little as possible just to make sure the rules are working this will continue and it will develop the national economy it's already difficult enough sometimes to get agreement to get a consensus within the ICT industry for standards and for agreement on best practices it does add a level of complexity if you have another industry sector but I think that's just the way it is and it's a challenge and I think looking forward to contributing to solving this challenge