Read the following passage and answer the following question:
MNOS (Mobile Network Operators) are better endowed to provide mobile financial services their FI (Financial Institution) counterparts. Strong technological infrastructure and wide distribution network is integral to develop MFS (Mobile Financial Services) eco-system 1 distribution network is widespread at the root level, even at the remotest locality, Inc competition may has forced private bankers to eventually opt for retail banking, but a ha branch network is straightway no match with an MNO's distribution network. MNOs also o key communication infrastructure required to provide mobile payment services. De (Unstructured Supplementary Service Data), a communication service controlled by MNO critical piece of infrastructure used to provide payment services on nearly any phone, at lo and without requiring access to the user's SIM card. So, in terms of technological infrastructure the reach of distribution network, MNOs enjoy strategic advantage over financial institutions.
Despite the above mentioned competitive edges, all MFS business module are not necessa MNC-led. Regulators across the world have questioned MNO's lack of exposure in dealing w people's money, safeguarding people's money. So, the preference for a bank-led MFS model over MNO-led MFS model is basically a regulatory phenomenon. But the risk of mobile-money acco holders losing their e-wallet (electronic-wallet) money can be mitigated if 100% of the cash back the e-money is held in a prudentially regulated financial institution. Regulators who have opted an MNO-led MFS module has also made sure that MNO does not intermediate the fund.
Under an 'enabling regulatory approach for MFS industry, it is expected that MNOs will w licensed directly (Kenya model) or be licensed to operate as a payment bank (India model) or allowed to operate through forming up a subsidiary. Regulators can always ask myriad questi questions regarding the status of an e-wallet (should it be treated as a deposit or not), regarding right to get interest on e-wallet saving, regarding MNO's stance towards launching credit prodes regarding interoperability opportunities. But regulators should also respect people's right to get b amenities like payment service at an affordable price. It is only the co-existence of bank-led a MNO-led MFS model that ensures an enabling environment in the MFS industry even under ever-cautious regulatory umbrella.
