Operational risk management of using electronic and mobile money

Abstract

The extensive use of electronic and mobile money causes additional risks, which complicates the work of electronic money issuers (EMIs) and the functioning of payment systems. The paper aims to investigate operational risk management in the process of using electronic and mobile money. A classification of operational risk types was carried out and the forms of their manifestation in payment systems using electronic and mobile money were characterized. The list of key risk indicators has been compiled to assess the operational risk factors of payment systems using mobile and electronic money; a classification of costs (losses) as a result of the implementation of operational risk events is proposed, dividing them into direct and indirect. Based on the statistics of the International Monetary Fund and the National Bank of Ukraine, the use of electronic and mobile money in certain countries of the world is analyzed. The results on the intensity of electronic money use are presented, and the value of the electronic money multiplier in Ukraine is calculated. To improve operational sustainability of EMIs, a general scheme for organizing the operational risk management process in payment systems using electronic and mobile money is presented. Particular attention is paid to the regulatory and supervisory measures aimed at supporting the operational sustainability of EMIs and payment systems under their control. The issues discussed in this paper are relevant for the debate directed at the implementation of balanced approaches to operational risk management in the process of using electronic and mobile money in developing and emerging economies.

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“…Regulatory policy provides a legal framework for the activities of Islamic banks, including the recognition of Shariah contracts and dispute resolution mechanisms, all these assertions are also supported by the findings of the study, which also shows that the legal regulation of Islamic banking by the state is based on the relevant law. For example, in Kyrgyzstan and Kazakhstan, Islamic banking is regulated by separate provisions of the laws on banking activities, while Tajikistan has adopted a special law that is aimed exclusively at the sphere of Islamic banking in the country (Mishchenko et al, 2022).…”

“…In addition, the regulations of all three countries pay considerable attention to regulating the maximum amount of risk that can be allowed per borrower of an Islamic bank (Mishchenko et al, 2022). In Kyrgyzstan it is 20% or 30%, depending on the type of borrower, in Kazakhstan, it is 10% or 25%, and in Tajikistan, it is 20% (Čihák & Hesse, 2010;Kettell, 2011;Beck et al, 2013).…”

Blockchain and fintech technologies in the digital space of financial and industrial companies

“…While the article provides valuable insights into the theme, there are some aspects of that it does not highlight. For example, potential benefits and opportunities that blockchain technology could offer to the Indian banking sector or detailed case studies of specific Indian banks that have successfully or unsuccessfully adopted blockchain technology [62], [63]. However, the paper contains a valuable assessment of the legal and regulatory environment in India that could impact the adoption of blockchain technology in banks.…”

Management of Operational Risks in Payment Systems

“…Дослідження питань управління операційними ризиками в платіжних системах у вітчизняній науковій літературі розглядається, переважно, в загальному контексті управління ризиками діяльності фінансових установ. Можна виокремити лише деякі наукові праці С. Буковинського [23], О. Дзюблюка [2], А. Гриценка [22], Д. Дорофєєва [16], Р. Квасницької [10], Є. Тіщенка [4], І. Форкун [10] та інших учених, що безпосередньо стосуються управління ризиками в платіжних системах. Серед зарубіжних науковців, які досліджують ці проблеми, можна назвати праці О. Аканфе [14], І. Бонета [27], С. Варгааба [32], Д. Гаудіо [34], Т. Іварінена [12], Б. Кларка [25], Х. Лейнонена [12], У. Франкіда [32] та інших.…”