Upskilling consumer associations to promote fair digital finance worldwide
Digital financial services continue to deliver substantial financial inclusion benefits and provide life-changing opportunities to communities, especially in Low- and Middle-Income Countries. In fact, as the latest Findex report shows, account ownership has risen to 76% of the global population and stands at 71% in developing economies.
Despite these encouraging developments, the risks associated with digital financial services from a consumer protection viewpoint remain a concern. New research by the Consultative Group to Assist the Poor (CGAP) reveals that there are new consumer risks emanating from advances in digital financial services, centring around fraud, data misuse, a lack of transparency and inadequate redress mechanisms. However, the path to consumer protection in digital financial services is clear. Evidence from research by Consumers International and CGAP in 2021 plainly showed that engagement with consumers is key to strengthening consumer-centred regulations and policies and importantly, building trust with consumers.
To drive forward this change, Consumers International is implementing the Fair Digital Finance Accelerator (FDFA). The FDFA is a unique, proactive community of practice that will strengthen channels of engagement with regulators and provide much needed thought leadership in consumer protection for digital financial services. Through a unique and vibrant community of consumer associations in Low- and Middle-Income Countries, we have established a platform for collaborative action, learning and collective influence on digital finance to shape the future for consumers.
The FDFA Training Programme
Central to the Accelerator is the FDFA Training Programme. In May 2021, we conducted a needs assessment exercise amongst 42 consumer associations from 37 countries. This showed there is a strong desire for modular training to understand the fundamentals of digital financial services, the risks specific to consumers and how to have informed conversations with the relevant regulators.
The FDFA Training Programme aims to build the capacity of consumer associations and improve their involvement in the regulatory processes of their respective countries. Consisting of short, consumer-protection focussed modules, the programme will enable consumer associations to gain a stronger grasp of digital finance to better lobby for enhanced consumer protection. Modules will be rolled out over the next three years.
The first training module, ‘Overview of Digital Financial Services Models, Products & Channels’, focusses on understanding the digital financial services ecosystem and how technology and partnerships work to deliver digital financial services products. This offers an introduction to digital financial services and sets the scene for the rest of the training programme.
Just this week we launched the second module, ‘Keys to understanding the regulatory processes and common regulatory solutions in Digital Financial Services’. At the end of the module, trainees will have a clear understanding of the various approaches that regulators worldwide are applying to digital financial services and will be empowered to build bridges with them.
Our Members are already reaping the benefits of the training. For example, an FDFA member from Zimbabwe told us how they were using the training material as a go-to resource when making public media appearances. Another FDFA member acknowledged their elevated confidence engaging in conversations about digital financial services, noting “I feel a lot more confident discussing financial services amongst peers”.
The Fair Digital Finance Accelerator Training Programme is open to Consumers International Members in low- and middle- income countries. To join the fight for fair digital finance in your country, email FDFA@consint.org.
- Friday 14 October 2022 at 12pm UTC: FDFA members can join our Module 2 Check-in session to connect and share your journey with other learners. Register here