Guide to Financial Consumer Protection in the Digital Era
Financial services are evolving rapidly, with a growing array of new technologies, unconventional providers and innovative combinations of financial and non-financial services. While this evolution can help enhance financial inclusion for women, low-income and vulnerable consumers, it also brings greater risks.
There is evidence that digital finance consumer risks, such as data protection risks, have increased in several markets over the last few years. Crises such as the COVID-19 pandemic exacerbate these risks, as vulnerable groups are more fragile due to economic hardship.
Consumer protection is considered a basic regulatory enabler for digital financial inclusion. Several emerging markets have taken important steps on consumer protection, including in digital financial services. Financial regulators and supervisors have adopted consumer protection regulatory and supervisory measures, and some global and national industry associations have developed codes of conduct.
At the same time, the growing and evolving nature of consumer risks in digital finance demands more effective, risk-based and innovative consumer protection actions. It also requires regulatory and supervisory approaches that put the customer at the center. Technology is providing promising solutions for financial authorities, for example through suptech - supervisory technology applications used to digitize reporting, monitoring and supervision processes.
The resources in this FinDev Guide offer insights on good practices, solutions and tools that regulators, supervisors and providers can adopt to ensure that consumers achieve positive outcomes in their financial journey.