This paper investigates current literature on mobile financial services, and evaluates their effectiveness in providing financial services to unbanked populations. Accessibility of mobile phones can aid poverty reduction for the unbanked. Mobile phones provide wide networks, with the advantage of physical proximity, and play a significant role in remittance transfers. Challenges that the mobile financial services industry faces include customer illiteracy, low awareness and lack of regulatory framework. The report explores risks that bank regulators and supervisors seek to mitigate when dealing with mobile financial systems.