Page 76 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Establishment of requirements for agents
Working Group Consumer Experience and Protection

Theme Agents
Audience for recommendation Regulators

Financial sector regulators should establish and supervise conditions and requirements for agents engaged in
DFS delivery, such as identification requirements and other qualifications. For conduct regulations, there should
be no material difference between those applying to agents of banks and agents of nonbanks, so as to allow a
consistent supervisory framework, avoid regulatory arbitrage, and create a level playing field that fosters compe-
tition and innovation.

Financial sector regulators should establish and supervise the conditions and requirements for agents engaged
in DFS delivery, regardless of the type of DFS provider on whose behalf they are acting (e.g., telcos, banks), so
as to establish a level playing field for DFS providers and avoid regulatory arbitrage. Regulators should establish
conditions and requirements to enable DFS clients to recognize authorized agents. Regulators should also hold
DFS providers accountable for meeting agent-related requirements, and establish fines or other repercussions
for noncompliance. DFS consumers should be able to trust that the agent they use is indeed empowered
to deliver the services, and should know who to turn to in case of recourse. (Refer to recommendations on
recourse.)

As CGAP advises, many countries permit a wide range of individuals and legal entities to be DFS agents , while
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others limit the list of eligible agents on the basis of legal form. All agents providing financial services should
be held to the same market conduct standards whether they are serving a bank or a non-bank DFS provider.
Regardless of what form agents take, The Model Legal Framework stipulates that agents and third-party
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service providers should be compelled to disclose to clients the nature of their relationship with a DFS provider
any time they are marketing, selling, or servicing consumer financial products or services, or when they are
providing services, including debt collection, in connection with consumer financial products or services. The
SBS of Peru states that agents shall have signs, plainly visible to the public, indicating clearly that they are a
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provider of services on behalf of the financial enterprise company with which they sign contracts.
Regulators should require that providers have contracts with agents or other outsourced service providers.
AFI states that contract templates for agents, as well as outsourced agent networks, should be reviewed to
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ensure that standards are in place. The regulator may find it useful to review or approve such standard form
contracts. The G20 High-Level Principles on Financial Consumer Protection state that regulators should
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indicate the conditions under which an agent can be sanctioned or see its license revoked.

23 Tarazi, M., Breloff, P.. CGAP Regulating Banking Agents (2011) https:// www. cgap. org/ sites/ default/ files/ CGAP- Focus- Note-
Regulating- Banking- Agents- Mar- 2011. pdf
24 Microfinance CEO Working Group (2015) Client Protection Principles: Model Law and Commentary for Financial Consumer Protec-
tion http:// smartcampaign. org/ storage/ documents/ Model_ Legislation_-_ English. pdf
25 Resolution S.B.S. Nº 775, The Superintendent of Banks, Insurance Companies and Private Pension Fund Administrators (2008)
http:// www. bu. edu/ bucflp/ files/ 2012/ 01/ SBS- Resolution- No.- 775- 2008- on- Regulation- of- Banking- Agents. pdf

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