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 misuse and fraud 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. By better protecting consumers, this may also enhance their trust and increase their usage of formal financial services. 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.
But the growing and evolving nature of consumer risks in digital finance demands more effective, and holistic consumer protection actions. Several industry players have already begun developing various solutions that can help address financial consumer risks, with CGAP paving the way towards a responsible digital finance ecosystem approach. This approach requires all ecosystem actors to play key roles in securing a responsible financial system by putting the customer at the center and collaborating in ways that protect and ensure positive outcomes for digital finance users.
This FinDev Guide consists of a selection of resources that 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.