Managing Digital Payments Risks: A Regulatory Perspective
Abstract
The global regulatory landscape has not kept up to speed with payments innovation. Banks are stewards of the global payments system, but find their incumbent position being challenged by competitors.
In the report Managing Digital Payments Risks: A Regulatory Perspective, Celent discusses critical issues in digital payments risk management and regulation. The report includes:
- A proposed payments risks and regulation framework.
- A discussion of payments risks and the goals and objectives of payments regulation.
- A taxonomy of digital payments from a regulatory perspective to categorize new payment offerings and rapidly determine the most critical risk and regulatory implications.
- A set of principles for developing the content of new regulations.
- A set of principles for how the regulations should be applied.
“Rapid innovation in digital payments poses new challenges for regulators and those responsible for managing payments risks,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and author of the report. “While this report does not call for any specific regulations to be introduced in any given country, the proposed framework and principles should be helpful for banks and regulators around the world as they engage in understanding and managing risks in digital payments.”
This 36-page report contains seven figures and six tables.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].
Media Contacts
North America (New York)
Dana Greenstein
dgreenstein@celent.com
Tel.: +1 646 364 8254
Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875
Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023
Table of Contents
Executive Summary | 1 | |
Introduction | 2 | |
Risk Management and Regulatory Framework for Payments | 5 | |
Why: Payments Risks and Regulatory Objectives | 7 | |
What: Taxonomy of Digital Payments | 10 | |
| Introduction | 10 |
| Traditional Payment Facilitation | 12 |
| Nonbank Stored Value Accounts | 14 |
| Virtual Currencies | 16 |
| Mobile Billing | 17 |
| Credit Facilitation | 18 |
| Summary of Regulatory Gaps | 18 |
How: Key Considerations | 20 | |
| Content | 20 |
| Applicability | 24 |
| Regulator and Compliance | 26 |
The Time to Engage with Regulators Is Now | 28 | |
Path Forward | 30 | |
Leveraging Celent’s Expertise | 31 | |
| Support for Financial Institutions | 31 |
| Support for Vendors | 31 |
Related Celent Research | 32 | |