These developments have the potential to lead to advances in risk management, credit extension processes and an economy that potentially makes less use of cash. The inclusion of previously under- and unserved consumers into formal financial services through the introduction of novel and bespoke products is a promising and welcome development.
As stated above, the pursuit of these developments, in the absence of appropriate and sound regulatory frameworks, could lead to the emergence of new risks. As an example, with these advances in technology, some of the platforms and systems have moved to the cloud. This is compounded by the rapid improvements and usage of mobile devices.