Page 12 - The Digital Financial Services (DFS) Ecosystem

6 The next ten years: Using the DFSs ecosystem 295

7 Structuring the future 297

8 Country stories 297

9 Considerations for financial policy makers 300

XI Over the counter transactions: A threat to or a facilitator for digital finance ecosystems? 301

Executive summary 302

1 Introduction 303

2 What and why of OTC transactions? 303
2.1 Defining OTC transactions 303
2.2 Prevalence of OTC 304

3 Are OTC as problematic as we thought? 305
3.1 Problem 1: OTC increase anti-money laundering (AML) / combating the financing of terrorism
(CFT) risks 305
3.2 Problem 2: OTC limits product evolution 305
3.3 Problem 3: Beginning with OTC locks you into the model 306
3.4 Problem 4: OTC reduce provider’s profitability 308
3.5 Problem 5: OTC creates volatility in market share 309

4 The irony of OTC: It’s client-centric 309
4.1 Market segmentation of account adoption 310

5 Supply-side perspective for banks and third parties 312

6 Conclusions 313

XII DFS Glossary 315

Digital Financial Services (DFS) Glossary 316

Bibliography 332

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