FinDev Guide

Guide to Financial Consumer Protection in the Digital Era

A curated list of the most relevant resources for policymakers, regulators and financial service providers
Mobile money agent, Kenya. Photo by Communication for Development Ltd.

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.  

Regulation and Supervision - Technical Tools

SupTech Tools for Market Conduct Supervisors

Practices and Tools Required to Support Risk-based Supervision in the Digital Age

Mystery Shopping for Digital Financial Services: A Toolkit

Do you have recommendations for other key publications on consumer protection? Please share them in the comments below, and submit them for publication on FinDev Gateway. 

For even more resources on consumer protection in financial inclusion, visit the FinDev Topic page on Consumer Protection.

Comments

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Isvary Sivalingam , Better than Cash Alliance
19 January 2022

Please have a look at the UN Principles for Responsible Digital Payments -at https://responsiblepayments.org/

The United Nations Principles Responsible Digital Payments focus on the following:

-Prioritization of women as a key cornerstone for sustained development
-New technologies are developed and delivered responsibly
-A stronger user lens scrutinizes all aspects of digital payments, and
-Recommendations to deliver positive lasting change
-These Principles define who needs to be responsible, what it means to be responsible and how to be responsible. They are not intended to provide a technical analysis of what each Principle, such as transparency, means in practice.

The UN Principles for Responsible Digital Payments were developed by the United Nations-based Better Than Cash Alliance, guided by its member governments, companies and international organizations. The Secretariat Team would like to thank their members for their bold leadership in responsible payment digitization practices and their insightful contributions to these Principles. This flagship resource responds to the UN Secretary General’s Roadmap for Digital Cooperation.

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