Fair Finance
In recent years, financial services have undergone a digital revolution, reshaping the way we spend, save and manage our money. The use of technology to transform banking and financial services, products, applications, processes and business models is referred to as digital finance, and can be an exciting catalyst for financial inclusion. Digital finance can drive financial inclusion by enabling faster and cheaper transactions, easier personal financial management, and greater access to a range of financial services for consumers.
However, the shift towards new technologies and a potential cashless society present new risks for consumers, such as scams, fraud, phishing, and data malpractice. Vulnerable consumers, especially low-income women and rural populations, are particularly at risk. Additionally, 2.9 billion people still offline and are excluded from the benefits of digital financial services.
We work with our Members, regulators, stakeholders and decision-makers at the highest level to ensure consumer protection keeps pace with transformations in financial services. This approach unlocks financial inclusion and protection for consumers across the world.
OUR VISION FOR FAIR FINANCE
We envision financial services to be inclusive, safe, data protected, and sustainable for everyone.
Building financial inclusion and resilience is vital for thriving communities and economies. We are ruthless in our commitment to digital finance products and services that alleviate poverty, prevent debt, create jobs, grow health and wealth, and enable us to plan for the future in a sustainable way. While digital finance services offer numerous benefits, achieving these goals will take effort.
In 2022, we brought together our global Membership of 200+ consumer groups in over 100 countries to set out the actions needed to build this vision. This resulted in our Consumer Vision for Fair Digital Finance.
For our vision to become a reality and to maximise finance benefits and prevent consumers being harmed, consumer associations, government, industry and civil society organisations must work together. Our approach provides the platform for that collaboration.
THE FAIR DIGITAL FINANCE ACCELERATOR
All consumers deserve access to fair digital finance. However, a survey of our Members across low-and middle-income countries revealed dissatisfaction with their current policies: 45% found them unsatisfactory, a further 45% called for ‘extensive improvements’, and only 6% rated them as ‘good’.
As part of our vision for Fair Digital Finance, we founded the Fair Digital Finance Accelerator.
Bringing together consumer advocates from close to 50 countries, the Accelerator is a unique and proactive community of practice of consumer associations in low- and middle-income countries.
It strengthens digital finance regulation and solutions, builds engagement with governments and stakeholders, and empowers consumer advocates to champion a safe, fair, and sustainable digital finance marketplace.
The Fair Digital Finance Accelerator is funded by the Bill & Melinda Gates Foundation, with support from the Consultative Group to Assist the Poor (CGAP).
Building the Consumer Voice for Digital Finance
Consumer protection frameworks and systems have not kept up with growing complexities. This is challenged by a lack of consumer voice in the digital finance ecosystem. Our research shows that only 21% of consumer advocates are included in policy deliberations on the design of new technologies in their country.
Our multistakeholder initiative, Building the Consumer Voice for Digital Finance, is designed to address these needs. Supported by the Mastercard Center for Inclusive Growth, the work explores and identifies effective digital finance models for vulnerable consumers. It aims to create a ‘guiding star’ of policies, regulations, industry best practices and innovations that improve consumer protection and empowerment.
To scale this guiding star and elevate the voice of vulnerable consumers, the initiative also creates a community of stakeholders with the influence, knowledge and networks to implement change. Together, these provide the evidence base for protecting and empowering consumers, and a collaborative structure for implementation.
ADDRESSING EMERGING RISKS IN DIGITAL FINANCE
Improving consumer trust and understanding through transparency
Our Members are increasingly concerned that opaque, misleading and inaccessible information in digital finance is harming consumers. Poor transparency is a significant issue, often due to the nature of digital interfaces that make lengthy terms and conditions hard to read on mobile devices.
Our global campaign for transparent digital finance has united an alliance of over 30 leading industry, regulator and consumer voices to call for urgent action. The alliance calls for universal access to relevant, timely and inclusive information to improve consumer understanding and trust in digital finance.
Proposing regulation that evolves with technology
As the digital finance sector has rapidly advanced, digital offerings can be more accessible, but are less regulated than traditional banking.
A useful example is Buy Now Pay Later (BNPL) products. In 2022, we brought global attention to the rapid rise of BNPL services, which allow consumers to pay for goods over time, with interest.
In many countries, BNPL products sidestep existing credit regulations and do not require checks on repayment ability. This puts consumers, especially those facing financial hardships, at higher risk of debt and over-consumption, particularly during a cost-of-living crisis.
Our global call saw leading consumer advocates from across nine countries urge governments to regulate BNPL products. This led to policy action, such as in Australia where the government committed to regulate such products.
Developing international standards for mobile finance
In 2023, there were 1.75 billion mobile money accounts – almost half of which are found in Sub-Saharan Africa, demonstrating the potential of the sector to help those traditionally excluded from the banking system. Despite its growth, in many countries mobile financial services regulations struggle to keep up with new developments.
Our international recognition enables us to represent consumers and enhance protection at the highest level. For example, we worked with stakeholders at the International Organization for Standards (ISO) to develop a new international standard for mobile financial services: ISO 12812 Core banking – mobile financial services.
Our approach was built on our knowledge of and connection to the lived experience of consumers. We fought for limits on consumer liability for unauthorised or fraudulent transactions. We secured greater transparency in international remittances and secured key safeguards for transaction logging and receipts. Additionally, we addressed the treatment of dormant assets in the event of death, a major issue in regions like Sub-Saharan Africa where many consumers lack individual mobile phone contracts.
Amplifying Consumer Experiences of Digital Finance
Consumers International represents the consumer voice in dialogue with business, government and others:
- In October 2024 we participated in Financial Inclusion Week and presented our work in digital finance at the first OECD Consumer Policy Ministerial Meeting.
- In September 2024, we elevated the voice of vulnerable consumers in digital financial services at the G20 Global Partnership for Financial Inclusion.
- In April 2024, we spoke to leaders at the Global Inclusive Growth Summit about the need to hear the voice of consumers in the design of digital finance products and services.
- In January 2024, we launched our second digital financial services index at GSMA MWC Barcelona.
- In December 2023 we unveiled our new multi-stakeholder initiative, Building the Consumer Voice in Digital Finance, alongside key partners at our Global Congress.
- In March 2022, we launched the Fair Digital Finance Accelerator at our Fair Digital Finance Forum, where we convened over 60 expert speakers to raise the visibility of the consumer voice in digital finance.
- In October 2022, we participated in the 30th Session of the G20-OECD Task Force on Financial Consumer Protection at a roundtable discussion on financial trends and their implications for consumers.
Watch our Fair Digital Finance Accelerator launch event, where we laid out the opportunity we see for a consumer-focussed regulatory environment in digital finance and discussed how we can bring this into reality through consumer advocacy.
Insights
Maximising consumer voices in digital financial services policy-making
August 2024
As the digital finance policy space becomes more complex, this report showcases how consumer organisations can use existing resources, connections, and expertise to drive change towards better digital financial services for consumers.
You can download the full report in English, French and Spanish.
Digital finance: The consumer experience in 2024
February 2024
Our annual financial sector index provides an assessment of the state of digital financial services in low- and middle-income countries. This report builds on our 2023 index to offer a unique perspective, derived from the vantage point of consumers themselves.
You can download the full report in English, French and Spanish.
Mobile Finance
January 2014
As more people make transactions using their phone, tablet or computer it is important that we can be sure these payments are secure and our consumer rights are fully protected.
Our 2014 briefing paper on mobile payments set out the main consumer protection issues with paying money through our phones.
Latest News
New report on maximising consumer impact in digital finance
We are excited to launch our report, "Maximising Consumer Voices in Digital Financial Services Policy-Making." This study, based on interviews with Consumers International Members across 13 countries, highlights innovative strategies by consumer organisations to enhance digital financial services. Designed primarily for low- and middle-income countries, it also offers valuable insights for high-income nations.
Campaign for transparent digital finance
Consumers International urges governments, civil society organisations, digital finance providers, and other stakeholders to endorse our multi-stakeholder call-to-action for greater transparency in digital finance. We seek to improve consumer understanding and trust through relevant, timely, and inclusive information for informed decision-making and protection from harm.
Consumers International recognised as a fair finance change-maker
This year, Consumers International received a 2024 Regtech Africa Award for 'outstanding contribution to regulatory innovation'. At the ceremony in Nigeria, we shared our journey of change driven by dedicated Members and collaborators.