CW Fin-Tech Toolkit Unravelling potentials of FinTech in CW

Apart from imparting knowledge on Fin-Tech, the CW Fin-Tech Toolkit offers much-needed guild lines for the CW countries to formulate policies that would bring about inclusive progress, while overcoming barriers imposed by the conventional monetary systems in member nations.

Exponential expansion of the Digital financial services (DFS) would help service providers to overcome the conventional barriers that virtually leave 3.5 billion people underserved or unserved by financial services. The host of benefits that DFS offer include lowering the costs of compliance with international laws and regulation.

Although most of the DFS are delivered through mobile devices and may be catogorised  as ‘mobile financial services’, the Commonwealth uses the term ‘digital financial services’ to include non-mobile technologies such as Paytm, which is used in India.

Expansion of access to finance by digital means could unravel productivity and investment, whilst reducing poverty and empowering women. It could help governments to build stronger institutional backbone with less corruption. At the same time, such far-sighted policies and institutions offer a lucrative market for financial service providers with profitable and sustainable business opportunities.  The benefits of DFS for individuals, businesses and governments could have the potential to rapidly transform developing economies into vibrant economies with a higher rate of growth.

Besides, digital financial services could fill a gap left by conventional banks, unwilling or unable to service those at the bottom of the wealth pyramid and income scales. DFS are often spearheaded by non-bank financial institutions (NBFIs) with the aim of offering the financially excluded an alternative to cash as a means of payment and transfer.

CW Fin-Tech Toolkit lays a foundation for a vibrant CW Fin-Tech ecosystem that would enable CW nations to realise the potentials of Fin-Tech as a tool for rapid development.   

CW Fin-Tech Toolkit

An innovative toolkit launched by the Commonwealth Secretariat assists CW countries unravel the potential of financial technology to deliver inclusive economic progress throughout the Commonwealth.  

The toolkit has been created on the requests of Central Bank Governors from across many Commonwealth countries and was developed by the Commonwealth Secretariat with funding from the Australian Government.

The toolkit, primarily, aims at supporting governments in creating a healthy regulatory and banking environment for FinTech to flourish, while securing consumer protection and financial stability. It also provides an action framework, offering practical guidelines on how countries could create an enabling environment and ecosystem for FinTech.

It covers major technical areas including artificial intelligence, blockchain and cybersecurity, and on how these technologies are being applied to reach development goals. It also recognises different national and regional issues that need to be considered to ensure FinTech is deployed according to each country’s needs.

Widespread of use of FinTech in CW Countries

Over the past decade, developments in financial technology (FinTech) have revolutionised many aspects of financial services and expanded the provision of banking services, particularly, through mobile devices. Driven by rapid advances in technology, financial services have become more easily accessible, cheaper and faster, reducing the cost by several folds. 

These developments led to the substantial growth in the use of FinTech across the Commonwealth, using mobile money in Africa and Asia and also the creation of a central bank-backed digital currency in the Caribbean and the use of digital identity processes in the Pacific.

FinTech could also help countries to overcome development challenges by improving financial inclusion and lifting people out of poverty, at the same time,  boosting jobs, business and economic growth.

In fact, FinTech has been a driving force behind bank account ownership approximately doubling across Commonwealth countries in the past 10 years.

CW Fin-Tech Toolkit

Vital role of Central Banks in Digital Financial Services

Government bodies in general, and central banks in particular play a crucial role in the success or failure of the implementation of DFS in a given country.

What is noteworthy is the fact that the local regulatory environment in which DFS function is said to be ‘enabling’ or ‘non-enabling’ according to the Global System for Mobile Communications (GSMA), which is the industry’s non-profit trade association.

Accordingly, an enabling environment is an ecosystem in which non-banks could independently provide DFS without having to partner with a licensed bank.

In most of the jurisdictions, a country’s central bank is the lead regulator on DFS. Among other regulatory measures, a Central Bank will define criteria for the licensing, authorise DFS providers and EMIs (e-money issuers) and also set standards for agents. Central bank also establishes consumer protection mechanisms, including schemes safeguarding pooled funds and customer accounts, while setting out guidelines on the safety and soundness of services. It also sets standards on quality and develop AML and know your customer (KYC) policies for use within the financial sector.

It is imperative that the businesses and government leaders will have to make a concerted effort in order to realise the potential benefits of DFS. Some of the structural prerequisites include a nation-wide mobile and digital infrastructure, a dynamic business environment for financial services and DFS products, meeting the needs of individuals and small businesses in manner that improve on the informal financial tools they use. The most important fact is that Central Bank should facilitate as well as regulate DFS to ensure competitive market which is beneficial for service providers as well as customers.     

Some of the case-studies

CW has some of notable case-studies that among, other things, demonstrate the sheer potentials of DFS in creating markets and wealth in the development process.  For instance, in India, the digital payments platform Paytm has revolutionised the digital transactions.    

The digital payments platform enables online payments as well as offline cash deposits via select banks and partners and the features have been incorporated into an integrated virtual wallet.

Customers could use the Paytm wallet to make payments for goods and services such as travel fares and hotel bookings, cinema visits, recharging a mobile phone and paying utility bills and also online shopping. The funds in the wallet are protected under Escrow Account, a type of account from which funds are released only once an agreement is fulfilled. 


In Nigeria, mobile technology has been successfully used to transfer fertiliser subsidies directly to farmers, relieving the Nigerian government of procuring and distributing fertiliser.

This resulted in not only increasing the beneficiary farmers to twice as many farmers at a sixth of the cost of the government’s former mechanisms. The transfer system depends on a database of more than 10.5 million farmers, who, as registered recipients of the subsidies.

They, now have a better chance of accessing formal or regulated financial services. Based on this initial success, the system is expanding, with the help of a digital identity system and biometric signatures, to extend the reach of financial services into Nigeria’s more remote rural areas.


M-Pesa and similar DFS are signs of a mobile banking revolution that is taking place in Kenya. Financial institutions have welcomed M-Pesa as a platform to manage micro accounts, to build customer deposits and to broad-base their customer networks. Due to this, Kenya has emerged as a leader and major player in financial inclusion in sub-Saharan Africa. Before the launch of M-Pesa, there were only 26.7 per cent of Kenyans, who had access to formal financial services (such as bank accounts and money transfers); this figure, has, now exceeds 80per cent. 

United Kingdom

In the UK, two banks have successfully used digital technology to reach out to under privileged segments; For instance, digital bank Monzo is using technology to authenticate and provide basic bank accounts for people who have been granted asylum in the UK. The bank has suggested that better digital identification in the UK could help to reduce the cost of providing financial services to disadvantaged groups.

At OakNorth Bank, machine learning has been applied to lending techniques earlier limited to large business to underserved SMEs. By using shared public data (with permission), such as tax returns, OakNorth is assisting to unlock savings for small businesses.

CW Fin-Tech toolkit lays a firm foundation for the nations in the CW to build on an enabling ecosystem for DFS, while its success or failure, by and large, depends on policies of successive regimes in the Commonwealth and the efficiency with which to implement them for the betterment of the society at large.

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