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Protecting Consumer in Mobile Finance:
Regulatory Issues and Options for Promoting Responsible Financial Access

Denise Dias
Policy Specialist and Manager for Latin America

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Policy goals, mobile finance and protection

What do you look for?

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Policy goals, mobile finance and protection

Consumer protection is embedded in promotion of financial stability AND healthy financial access, for it may help:

Consumer protection is the convergence of healthy access and systemic stability goals but it is not a precondition for access

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Branchless banking: New ways of doing business

Client-provider (bank or nonbank) relationships are:

How do these features relationships affect consumer protection?

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Does mobile finance bring value for the consumer?

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What can go wrong? Evidence and perceived risks

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What can go wrong? Evidence and perceived risks

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What should be the regulator’s priorities?

  1. Protecting clients’ deposits (bank- and nonbank-based);
  2. Ensuring security, reliability and availability of electronic channels and transactions;
  3. Protecting clients’ personal information;
  4. Reducing opportunities for agent frauds and misbehavior;
  5. Ensuring agents deliver good and fair service;
  6. Ensuring clear and comprehensive disclosure;
  7. Ensuring liability for the services provided;
  8. Ensuring the client knows and has access to effective redress and compliant filing mechanisms.

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Before protecting, ask yourself

What are the current alternatives to mobile finance? (e.g. informal services)

What risks consumers face today without mobile finance?

How does mobile finance change the risks? (e.g. money laundering risk)

Image of a down arrow asking the next question

What is a proportional regulatory approach in your case? (Promotion x Protection)

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Principles for protection through regulation

Some regulations may protect consumers out of the formal market or towards less suitable services

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Remember that regulation is not enough

Image of three arrows for Responsible Financial Access
Up Arrow is for Consumer Protection Regulation
Left Arrow is for Industry Codes of Conduct and Standards
Right Arrow is for Consumer Awareness and Financial Capability

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Image of CGAP logo

Advancing financial access for the world's poor

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