Digital Financial Services and Operational Risks in Ethiopia: Implications for the Necessary Regulatory Frameworks
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Date
2024-05-06
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Publisher
A.A.U
Abstract
Research aims: This research aims understanding the nature of operational risks as well
as review of existing regulatory frameworks.
Design/Methodology/Approach: By using qualitative research methods, face to face as
well as virtual interviews with fintech representatives (CEOs, risk management experts,
legal personnel), and bank CTO (chief technical officers) the task was able to secure
important information. The data was thematically coded and validated with the above data
sources.
Research findings: Analysis revealed: (1) even officers at the respective organizations do
not give many emphases to operational risks compared to the others, (2) there are new and
innovative ways and approaches that fraudsters use to convince novice digital financial
service users, (3) existing regulatory frameworks are not up to date, not complete enough
to deal with such sophisticated approaches.
Research Recommendation: the researcher recommends the regulatory body to begin
collaborating closely with the providers of digital financial services in order to establish
regulations, develop close monitoring protocols, and develop a strategy for continuous
improvement in closing the gaps and creating a suitable environment for the digital
financial industry.