Managing the Risk of Fraud in Mobile Money

This paper outlines a framework for managing fraud and risk associated with the provision of mobile money. It also highlights some effective practices that operators use to manage the risk of fraud, in order to assist mobile money providers as they continue to review and enhance their risk management strategies. The paper states that managing the risk of fraud in mobile money is challenging. Fraud results in financial loss to customers or a mobile money provider, damages the reputation of the service to the customer, and risks the reputation of the industry as a whole. Therefore, mitigating the risk of fraud is a primary objective in a robust risk management strategy. Operators are aware of the need to develop a robust risk management strategy for mobile money. Specific risk management strategies vary from operator to operator and are affected by factors such as stage of development, organizational structure, number of product offerings, regulatory environment, and local market context. The four key elements of this framework are:

• Determining risk appetite;
• Identifying and assessing risks;
• Establishing effective controls;
• Monitoring and reviewing the risk management strategy.