Strong call for consumer protection in digital financial services era

As digital technologies increasingly make it easier to provide financial services to previously excluded communities, it’s crucial to improve consumer protection.

That’s the view of United Nations Conference on Trade and Development (Unctad) secretary-general Mukhisa Kituyi.

During the opening of a two-day global meeting on consumer protection in Geneva yesterday, he told delegates that increased access to financial services – particularly in emerging economies – increased the risk of irresponsible lending practices and over-indebtedness.

“New technologies make today a right moment for leapfrogging old business models, but this can risk disrupting consumer rights,” said Kituyi. “And this should not be taken lightly, whether with respect to mobile money in Africa or digital databases on consumer identity in India.”

Bank of Portugal’s director of banking conduct supervision, Maria Lúcia Leitão, said that by protecting consumers, governments would also be fostering financial stability.

“Regulators need to guarantee technological neutrality,” she added. “When consumers go digital, they need to have the same rights they were granted when using traditional channels.”

Kituyi noted that protection could be increased through financial education as well as by identifying which initiatives were the most successful and emulating them.

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