3 Key Risks in Going Digital – and How Microfinance Institutions Can Address Them: Grameen Foundation provides risk management tips for MFIs adopting mobile solutions

By Kaylene Alvarez, Athena Global Founder and CEO

Editor’s note: This is the second in a series by Grameen Foundation on what it takes for institutions that provide microfinance services to go digital. You can read the first post here.

The speed and convenience that make digital services attractive to clients can bring a host of new risks for financial institutions that serve the poor.

For customers, digital services offered via third-party agents eliminate the need to carry cash long distances, and give them more visibility into their accounts through their mobile phones. For financial institutions, going digital means more transactions at a much faster rate with much less direct contact with clients. This can create risks in three key areas:

1. Centralized decision-making

2. Reactive vs. proactive risk management

3. Vendor and distribution partners

Continue reading …

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