Integrity in Mobile Phone Financial Services : Measures for Mitigating Risks from Money Laundering and Terrorist Financing
This working paper explores strategies to identify and manage potential money laundering (ML) and terrorist financing (TF) risks in mobile financial services (m-FS). Using fieldwork in seven economies as a basis, the paper provides guidance on the...
| Main Authors: | , , , |
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| Language: | English en_US |
| Published: |
Washington, DC : World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/06/9854049/integrity-mobile-phone-financial-services-measures-mitigating-risks-money-laundering-terrorist-financing http://hdl.handle.net/10986/6530 |
| Summary: | This working paper explores strategies
to identify and manage potential money laundering (ML) and
terrorist financing (TF) risks in mobile financial services
(m-FS). Using fieldwork in seven economies as a basis, the
paper provides guidance on the best means of assessing
perceived versus actual ML and TF risks, and then identifies
specific measures to mitigate the actual risks. The paper
concludes with recommendations that aim to promote a
regulatory balance to foster an enabling environment for
business while minimizing ML and TF risks that hinder its
sustainability. The paper identifies four risk factors in
m-FS and appropriate mitigation responses. The risk factors
are anonymity, elusiveness, rapidity, and poor oversight.
Anonymity is the risk of not knowing a customer's
actual identity, and it can be diminished through enhanced
know-your-customer procedures and identification tools.
Elusiveness is the ability to disguise mobile transaction
totals, origins, and destinations. It can be diminished
through transaction limits and enhanced customer profiling,
monitoring, and reporting. Rapidity is the speed with which
illicit transactions can occur. Its risk is checked by
flagging certain types of transactions and managing risks of
third-party providers. The fourth type of risk is poor
oversight, which can be mitigated by transparent guidelines
on mobile services, clearer licensing, regulation of
providers, and effective risk supervision within bank and
non-bank m-FS providers. |
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