BY Louise Malady

 

Consumers in many emerging markets are not becoming active users of the digital channels which are now readily available. This is a paradox - the opportunity now exists for greater financial inclusion, yet consumers are not embracing it. One key reason is the absence of consumer trust and confidence in the new channels. However, while consumers’ financial transactions remain in the informal cash and barter economy, consumers are missing out on the economic empowerment benefits of financial inclusion and economies in emerging markets also miss out on economic boosts which come from more people being financial included. Financial regulators need to focus on how to build this trust and confidence when they strengthen consumer protection frameworks. In particular, regulators need to view the DFS from the consumers’ perspective. This paper presents an approach for regulators to follow which extracts from the myriad of principles, codes of conduct and standards for financial consumer protection and provides a way forward for regulators to build consumers’ trust and confidence in DFS.