Digital Financial Governance Capacity in Emerging Economies: A Multi-Dimensional Analysis of Regulatory Gaps and Institutional Challenges in Puntland and Somalia

Background Emerging nations are rapidly seeing "technological leapfrogging" in digital finance, often bypassing traditional banks in favour of mobile-centric systems. In evolving territories such as Somalia and Puntland, this acceleration frequently surpasses the capacity of regulatory institutions to uphold systemic stability and transparency. Methods This research employs a non-reactive, mixed-methods triangulation approach, integrating four primary administrative and census datasets from the Somalia National Bureau of Statistics (SNBS) published between 2022 and 2024: the Business Establishment Census (SIBEC), the Integrated Household Budget Survey (SIHBS), the Governance Statistics Report, and the GDP 2024 Release. These were generated by a "Comparative Gap Analysis" (CGA) and textual examination of regulatory papers to evaluate the divergence between market acceptance and institutional oversight. Results Research reveals a notable "Regulatory-Adoption Mismatch." SIBEC 2024 data indicates an 88% adoption rate of digital payments among urban enterprises in Bosaso; nonetheless, the Governance Statistics Report underscores considerable deficiencies in cyber-forensic infrastructure and specialized personnel. Furthermore, SIHBS 2022 reveals a structural "Identity Void," as 84.7% of the adult population lacks official identification, hence obstructing the implementation of bank-led Know-Your-Customer (KYC) processes. Conclusion The study concludes that digital financial governance in the region is characterized by "Reactive Policy Cycles" and institutional fragmentation. Effective reform requires a transition from manual oversight to the incorporation of Regulatory Technology (RegTech) and the emphasis on a National Identity System as a prerequisite for financial formalization.