Demystifying regulatory concerns around the use of cloud services in mobile money

Globally, players in the financial services industry are now adapting their business models to embrace the cloud, and leverage new solutions provided by financial technology providers (fintechs) in order to improve their services and lower their investment costs. Cloud-based solutions offer several benefits such as economies of scale, flexibility, operational efficiencies and cost-effectiveness.

In 2019, the mobile money industry reached one billion registered mobile money accounts. With over $1.9 billion being processed daily, the mobile money industry plays a key role in reaching the underserved and fostering socio-economic development. For the mobile money provides (MMPs), there is need to adopt these technological changes to increase scalability and contribute to bridging the financial inclusion gap in a sustainable manner.

This report unpacks several benefits that the mobile money industry can take advantage of by leveraging the cloud. It looks at how data localisation requirements impact mobile money providers, and their ability to innovate and increase the reach of their services.  The paper also discusses key regulatory concerns in the use of cloud in mobile money services, such as data privacy, national security, economic impact and supervision by local regulators; and looks at how these can be addressed without restricting the use of the cloud for MMPs. Through an overview of global practices by financial regulators, this report seeks to provide practical guidance for both regulators and mobile money providers to mitigate the risks associated with the use of cloud technology in mobile money services.

The mobile money industry seeks innovative ways to increase breadth and reach of its services, there is need for closer collaboration between regulators and MMPs to effectively address any risks of emerging technologies. The GSMA remains committed to facilitate and enhance collaboration between key industry players, and welcomes all interested parties to reach out to find out more on this and other relevant topics for the mobile money industry.

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