Digital Financial Services for Financial Inclusion: Tools for Supervisors


  • Regulators in many developing economies have made substantial progress toward putting in place basic regulatory enablers for inclusive digital financial services (DFS). The results include more diverse markets in which regulated nonbank DFS providers compete against and cooperate with incumbents, to serve a wider range of client segments, including low-income people.
  • However, progress has been slower in building effective risk-based supervision of DFS, due to reasons such as competing priorities, lack of resources and expertise.
  • This CGAP Technical Guide aims to help supervisory authorities in developing countries where DFS is pivotal for financial inclusion.
  • It offers practical guidance on the design and implementation of a risk-based supervisory approach focused on nonbank DFS providers and highlights common implementation challenges. Additionally, it briefly discusses a few emerging supervisory issues raised by innovative DFS, namely cloud computing, modularization, open finance, and artificial intelligence and machine learning.
  • The Technical Guide is complemented by several additional examples and guidance which have been developed in the course of CGAP’s engagement with various supervisors, and an extensive list of additional readings for supervisors who want to improve their risk-based supervisory approach to DFS.

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