It has been more than 10 years since CGAP first studied emerging financial services models that use agents as alternative delivery channels and digital technology to connect customers to their financial services providers. CGAP has been exploring the potential to advance financial inclusion through what was then called branchless banking, but nowadays is better known as digital financial services (DFS). What started off as a niche topic is now part of the mainstream of financial inclusion. From the beginning, the creation of an enabling regulatory framework was thought to be one of the drivers of success for DFS.

In 2008, CGAP published their first comprehensive report on regulating DFS, which identified the key regulatory building blocks. Among these are the four basic regulatory enablers that have guided their work in creating appropriate regulatory frameworks for DFS in 10 countries in Africa and Asia. In this paper, CGAP revisits their experience and share lessons gleaned from their in-country work.

Each country in the study had its own approach that took into account the influence of the market, the political economy, the broader regulatory system, the level of technological development and innovation, and cultural and historical experiences that were unique to each country. Despite these differences in country context, the basic regulatory enablers have proven to be key in laying the foundation for a thriving DFS market.