Fraud in Mobile Financial Services: Protecting Consumers, Providers, and the System

09 Sep 2017

This Brief highlights how fraud is impacting mobile money providers, agents, and consumers, as well as efforts to reduce risks and vulnerabilities to fraud in mobile money and related services. While it is not possible to remove fraud entirely from any service—mobile money included—the examples addressed here show that fraud is a major issue in several key markets for consumers and agents, and that there are simple steps providers can take to reduce their vulnerability to common fraud types.

These steps include improving internal controls, building agent capacity to protect themselves and their customers, and revisiting procedures such as account access and SIM swaps, where necessary, to prevent common fraud schemes. With the introduction of new products and delivery channels, the types of fraud will continue to evolve, which means that monitoring mechanisms, such as compliance checks and customer feedback channels, will continue to be key elements to effective fraud and risk mitigation.

Mobile Insurance and Risk Framework in Ghana

22 Mar 2016

This study has been commissioned by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), on request of the National Insurance Commission (NIC) which is the regulatory and supervisory authority of the insurance sector in Ghana. The support is part of a component of the German and Ghana Governments’ ‘Programme for Sustainable Economic Development (PSED)’ which is dedicated to promoting the development of insurance in Ghana (PromIGH) Ghana. The objective of the study was to carry out a detailed risk assessment of the mobile insurance landscape in Ghana and develop a risk assessment framework, to be used for improving the regulatory guidelines for m-insurance products in Ghana.

Mobile insurance (m-insurance) is an innovative line of insurance products, whereby the mobile networks are used to deliver one or multiple components of insurance for the mass market. In Ghana, m-insurance plays an important role in the microinsurance sector. Approximately 60% of lives (as of 2014) are insured by microinsurance products delivered via mobile insurance. Mobile insurance models could be either strategic (Mobile Network Operator (MNO) ofers insurance under its own branding) or transactional (MNOs provide the platform only for a purely transactional role).

The present study is focused on the analysis and risk assessment of the strategic model for the following reasons:

a. Products via the strategic m-insurance model are economically more significant for the microinsurance sector in Ghana (over 5m GHS in premiums in 20141) than the transactional model.

b. In a strategic model the regulatory factors are more complex, due to the active role played by multiple stakeholders in product development, delivery and maintenance: MNOs, Technical Service Providers (TSPs), and financial institutions. Hence, close collaboration among regulators (insurance, mobile network and banking regulators) is required in order to ensure adequate consumer protection, client value and financial sustainability for the products.

c. In a transactional model, the MNO plays a more passive role in simply providing a platform for diferent insurance processes, such as premium collection and claim payment. Hence, the regulatory environment and regulations developed by the insurance regulator may be sufcient for this model.

2015 Mobile Insurance and Risk Framework Assessment in Ghana

12 Feb 2016

Mobile insurance (m-insurance) is an innovative line of insurance products, whereby the mobile networks are used to deliver one or multiple components of insurance for the mass market. In Ghana, m-insurance plays an important role in the microinsurance sector. Approximately 60% of lives (as of 2014) are insured by microinsurance products delivered via mobile insurance. Mobile insurance models could be either strategic (Mobile Network Operator (MNO) offers insurance under its own branding) or transactional (MNOs provide the platform only for a purely transactional role).

The objective of the study was to carry out a detailed risk assessment of the mobile insurance landscape in Ghana and develop a risk assessment framework, to be used for improving the regulatory guidelines for m-insurance products in Ghana.

Over-Indebtedness of Microborrowers in Ghana

01 May 2014

Providing access to finance for those excluded from the formal financial system was and still is the mission of microfinance. What has changed, however, are the main challenges on the way to success. In the past, the financial sustainability of the service was the main hurdle to be cleared. Today, responsibility in service provision claims more of our attention.

This is because something has happened that seemed virtually impossible only a few years back. In some parts of the world where microfinance services have expanded rapidly, the problem is no longer too little access to finance, but too much. A phenomenon that has previously been known exclusively in industrialized countries has reached the developing world: over-indebtedness.

Over-indebtedness has to be taken very seriously, particularly since in many countries where microfinance operates, customer protection and social safety nets are not well developed. Accordingly, a customer with an unsustainable debt burden cannot file for insolvency and expect official procedures to pave the way to a fresh start. Few debt counseling agencies exist, and in most places there is no social security system to provide a subsistence income for the family if a microfinance client fails. In a nutshell, when a microfinance client becomes over-indebted, she is on her own.