Digital financial services in the Pacific – Experiences and regulatory issues

Asian Development Bank


This paper examines how digital financial services (DFS) can be used to improve financial inclusion in the Pacific. It looks at the current use of DFS in seven Pacific island countries, explores the regulation and supervision of DFS, and provides recommendations for the expansion of DFS in the Pacific.

The paper explains the two main models for the supply of DFS: bank-led branchless banking, in which banks leverage telecommunications services and agents to enlarge their customer base and increase their market share; and DFS provided by mobile network operators, which act as the business owner, contracting with one or more banks to provide services such as float holding and regulatory engagement and compliance. The paper then describes in detail the current provision of DFS in Fiji, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, and Vanuatu.

The paper then considers the how DFS should be regulated, paying particular attention to questions of money laundering and terrorism, protection of customers funds, protection from mis-selling of services, and interoperability between different DFS providers. The paper then makes a number of recommendations to ensure that DFS continue to improve financial inclusion in the Pacific:

  • Build consumer trust in DFS through transparency, keeping products simple, and educating consumers about new products.
  • Improve access by strengthening agent networks.
  • Promote regulatory environments that enable the expansion of DFS.
  • Encourage cross-regulatory cooperation.


Asian Development Bank. (2016). Digital financial services in the pacific – Experiences and regulatory issues. Manila: Asian Development Bank.