Legal and regulatory framework for mobile banking in Tanzania

Abstract

Purpose This paper aims to assess the legal and regulatory framework for mobile banking (M-banking) in Tanzania. The technological development in information and communication technologies has converted a mobile phone from a simple communication device to a very complex instrument that allows people to perform various digital transactions and extra operations such as web browsing and email reading. Such tremendous developments have brought in place the regime of M-banking. The birth of M-banking has brought legal and institutional challenges that were not anticipated before. It has complicated the traditional role of the telecommunication regulator and financial regulator in the business and caused legal gaps that need to be bridged. Design/methodology/approach To disclose the legal gaps and bridge them, the study used doctrinal legal method and comparative study to learn the experience of international legal instruments and policies and laws of other jurisdictions. This paper has evaluated the contribution of international legal instruments and legal frameworks of foreign jurisdictions such as Kenya and the Philippines. Findings It has been revealed that the prevailing laws regulating M-banking in Tanzania do not adequately address and bridge the existing legal gaps. There is a need to enact a specific law regulating M-banking and confer such powers to a specific institution to deal with regulatory issues. Originality/value This paper stresses the importance of enacting new laws that will offer room for financial inclusion in the digital economy and protect consumers against financial risk. It also intends to act as a catalyst and change agent in policy and legislative development in the M-banking industry. It would also bring special attention to addressing consumer rights, security and risky issues surrounding the M-banking industry. Although several other authors in Tanzania have written in this area, they have not clearly focused on disclosing the existing legal gaps resulting from the convergence of the financial and communication sectors. This paper is therefore trying to offer an extensive discussion on the legislative development in the M-banking industry in Tanzania.

Consumer Trust in Digital Banking: A Qualitative Study of Legal and Regulatory Impacts

“…Our findings reveal that the presence of strong compliance standards, consumer protection policies, transparency, and enforcement mechanisms significantly enhances consumer trust in digital banking. This is particularly relevant in the context of Ally's (2023) discussion on the comprehensive legal frameworks for mobile banking in Tanzania, which underscores the necessity of robust legal structures to safeguard consumer interests and ensure service credibility (Ally, 2023). Similarly, the transformation of legal impacts in digital environments, as examined by Berg (2022), supports our findings by demonstrating how updated legal frameworks that keep pace with technological advancements foster consumer trust.…”

“…he rapid advancement of digital technologies has profoundly reshaped the banking industry, pushing the boundaries of how banking services are delivered and consumed (Ally, 2023;Martínez-Navalón et al, 2023;Mohamad et al, 2023;Tham et al, 2022). This shift has led to the widespread adoption of digital banking platforms, which now serve as a primary interface between financial institutions and their customers.…”

“…Digital banking, by virtue of its technology-driven nature, necessitates robust legal and regulatory frameworks to ensure security, privacy, and reliabilityall critical to building consumer trust. Studies like those by Ally (2023) highlight the specific legislative measures tailored to the context of mobile banking in Tanzania, T providing a framework that is increasingly being mirrored globally to adapt to the new digital realities (Ally, 2023). Similarly, the international perspective on the adoption and trust mechanisms in mobile banking, as explored by Baabdullah et al (2019), indicates a convergence towards an integrated model that accommodates technological, behavioral, and legal dimensions (Baabdullah et al, 2019).…”