A Review of the MFS Regulatory Framework to Control IFF in Bangladesh

Absztrakt

Mobile financial services (MFS), with their focus on technology and
ease of use, have emerged as a novel approach for developing countries to
address the problem of adopting best practices to promote financial inclusivity.
However, if there are no effective regulations or guidelines in place on a
national and international level, the purpose of achieving full financial
inclusion and the Sustainable Development Goals might go in vain. For
instance, to prevent illicit financial flow (IFF) and ensure that this financial
system operates properly, the central bank of Bangladesh, one of the world’s
fastest-developing nations, implemented the most recent MFS rule. However, a
number of MFS-related fraud incidents have prompted scholars to critically
assess the Bangladesh Bank’s (BB) MFS regulatory system with a focus on the
efficiency of IFF prevention. This study has demonstrated that the current
regulatory system has a weak KYC verification system using a comparative
methodology. Following that, if someone has access to someone’s personal
information, they also have access to their MFS accounts. In general, the
current MFS adheres to a risk-based regulatory paradigm that forces
regulators to wait until a hazard occurs and limits them to this legal framework.
Policy makers would then be advised by this study to implement a smart
regulatory approach in order to establish a climate that is anti-IFF.