The digital finance sector has ushered in a revolution, promising broader access and inclusivity. However, as the world embraces this shift, vulnerable consumers—such as those with disabilities or experiencing economic hardships—continue to face significant barriers. Ensuring that the promises of digital finance are fully realized requires concerted efforts from all sectors to address these inequalities.
Research from Consumers International highlights that vulnerable groups often encounter higher risks, including falling prey to scams more frequently and struggling to make informed financial decisions. According to their findings, over half of vulnerable consumers (52%) report being victims of scams, compared to just 19% of less vulnerable individuals. Furthermore, 61% of vulnerable consumers have difficulty understanding financial products and services, as opposed to 32% of the broader population.
As these figures demonstrate, vulnerability is a fluid concept, impacting individuals across various stages of life. Whether due to health setbacks, income shocks, or digital limitations, many people will experience vulnerability at some point, which in turn leads to worse financial outcomes. To tackle these challenges, several approaches can help make digital finance more inclusive for all.
1. Centering Consumer Voices in Decision-Making
Engaging consumers directly is crucial for shaping financial products that meet diverse needs. Involving a broader spectrum of consumers in discussions ensures that services remain relevant and accessible. It also provides a clearer picture of whether changes are truly improving financial well-being. By fostering direct conversations with consumers, financial services can be tailored to address their unique needs, resulting in better outcomes for both individuals and providers.
For example, the Nigerian Consumer Advocacy & Empowerment Foundation (CADEF) has been actively advocating for the rights of persons with disabilities. In consultations with hearing- and visually-impaired individuals, CADEF identified significant challenges, including feelings of exclusion due to inaccessible technology and concerns about security. In response, the group organized awareness programs and facilitated communication between these consumers and policymakers. These efforts culminated in the development of a bill of rights for people with disabilities, empowering them to navigate the digital finance world with confidence.
2. Fostering Collaboration Across Stakeholders
Collaboration between consumers, regulators, service providers, and policymakers often leads to more effective solutions. One common issue in digital finance is the difficulty consumers face when trying to lodge complaints. In Mexico, for instance, the Tec-Check platform addressed this gap by offering a collective complaint system, enabling consumers to voice concerns and seek resolution through a shared platform. By compiling data from over 95,000 complaints via social media, Tec-Check worked with government bodies to address consumer pain points and improve service delivery.
This initiative illustrates the value of collaboration, where consumer groups act as a bridge between users and providers, ensuring that consumer experiences are heard and acted upon.
3. Advocating for Stronger Consumer Protection
The urgency of protecting vulnerable consumers cannot be overstated. To accelerate change, collective action is essential. In 2024, consumer organizations around the world came together to push for greater transparency in digital finance, a major concern for many. Hidden terms and conditions, convoluted language, and unexpected charges have cost consumers billions annually.
A global movement has called for clearer, more transparent communication regarding fees and terms. One success story comes from the Barbados Consumer Empowerment Network (BCEN), where the Central Bank of Barbados implemented market conduct guidelines for commercial banks. These guidelines require transparent fee disclosures, robust dispute resolution systems, and customer satisfaction surveys, which have strengthened consumer trust in the banking system.
BCEN’s Executive Director, Maureen Holder, noted that while challenges persist, these guidelines have empowered consumers to make more informed financial decisions and improve their interactions with banks.
The Path Forward for Digital Finance
With over 5 billion people already using digital payments, and the global population increasingly adopting digital banking, the risks faced by vulnerable consumers are growing. To fulfill the promises of digital finance—access, inclusion, and ease of use—it is critical that the industry moves beyond simply offering services to consumers.
Building digital finance solutions with consumers, not just for them, is key to ensuring inclusivity. Amplifying consumer voices, fostering collaboration, and advocating for stronger protections will ensure that the benefits of digital finance reach everyone, especially the most vulnerable. It’s time to empower consumers to take control of their financial futures in the digital age.
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