Page 63 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Appropriate supervision & market monitoring measures
Working Group Consumer Experience and Protection

Theme General framework
Audience for recommendation Regulators

Regulators should have in place appropriate supervision and market monitoring measures to hold DFS providers
accountable for consumer protection outcomes. These should include standardized, electronic reporting require-
ments for fraud, complaints, products, etc. Regulators should also consider using consumer research, such as
mystery shopping and SMS or IVR surveys, and other consumer engagement.

In order to adequately supervise and monitor their markets, regulators should require DFS providers to regularly
report data related to complaints, fraud, types of product, and other relevant issues, segmented by channel,
product, and service. Review of this information allows regulators to verify provider compliance with existing
laws and regulations, and allows regulators to spot new issues, trends, and potential problems. The AFI notes
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that as quantitative and qualitative data is collected and analyzed over time, regulators can use this information
to make necessary adjustments to consumer protection and market conduct regulations and guidelines. The
State Bank of Pakistan, for example, requires monthly reports on customer complaints of fraud and forgery
incidents related to agent banking and actions taken.

Regulators should require DFS providers to submit reports using a standard template to facilitate offsite review,
statistical analysis, and comparison across providers and products. Where practicable, providers should upload
this report electronically. G20 High-Level Principles on Financial Consumer Protection also recommend that
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aggregated complaints data and their resolution be made public, which would further enhance accountability
and transparency.

Regulators should also use consumer research for supervision and market monitoring. Such research can be
used to measure compliance with existing regulations and identify new problems that need to be addressed.
For example, mystery shopping can identify how well agents comply with requirements to display fee charts,
and how common it is for agents to overcharge. A mystery shopping study conducted for the ITU found that
only 66 percent of agents visited in Zambia had fee charts displayed.

Other methodologies, such as SMS or IVR surveys, can give larger-scale, market-level indicators of consumer
protection issues. A SMS survey conducted for the ITU, for example, found that 17 per cent of mobile money
users in both Tanzania and the Philippines have lost money to a mobile money fraud or a scam. Such surveys
can also assess consumer attitudes and perceptions on newer consumer protection issues. For example, the
same survey for the ITU found that mobile money users in Ghana and the Philippines are most concerned about
data privacy, while Tanzanians are less concerned. Regulators can also apply behavioural insights gathered from
consumer research to inform their regulations. Finally, findings from consumer research can be triangulated
with other data sources, such as complaints data from providers, to better understand the market and enforce
regulations.

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