Some useful links and resources, listed below, came up in the second round of today’s faiVLive discussion of digital money. Watch the full webinar recording here.
Read MoreViewing all posts with tag: Consumer Protection
When is Fintech Pro-Poor? 4 Key Takeaways on Risk, Transparency & Sector Priorities
Are Complaints the True Voice of the Customer?
Complaints – whether expressed on social media or through formal grievance redress channels – are transparent windows into what consumers are thinking and experiencing. They are a critical source of information for protecting consumers, but they require care in interpretation and response.
Read MoreEpitaph for the Smart Campaign
Many microfinance loan officers in Pakistan receive a high proportion of their pay in performance bonuses that reward keeping delinquencies low. Normally, the performance incentives are well-balanced, and loan officers follow guidelines for respectful client treatment. But in the face of rising delinquencies due to the Covid-19 lockdown, FAI research reported a tendency for loan officers to resort to high-pressure loan collection tactics to protect their bonuses.
Read MoreHopes and Fears for the Future of Digital Financial Services: Views from Five Experts
From the start of the outbreak, digital finance providers were seen as a solution to some of the effects of COVID-19. Mobile money providers potentially offer a safer alternative to cash and some governments immediately turned to digital solutions to distribute much needed cash relief. That digital providers offered creative solutions under pressure is laudable, but perhaps not surprising, as most digital services are born from an opportunity to improve a dysfunctional system.
Read MoreBanking on Human Capital: What Financial Institutions Need to Do – Now – to Enable a COVID-19 Recovery
Every crisis carries its own signature, unfolding with distinctive timing, impact and, ultimately, recovery. Floods have a short, sharp impact, and recovery begins as soon as the waters recede. Other crises, like the 2009 global financial meltdown, linger for years.
For the novel coronavirus, many epidemiologists predict a series of waves for the next year or so, with lockdowns beating back the virus only to have it flare up again when those measures are eased. As policymakers with limited information struggle to find the right balance between the health of people and the health of the economy (while also working to keep themselves in power), we can expect a juddering mix of policy-induced economic slowdowns that could go on for months – if not longer.
Read MoreFinancial Consumer Protections in Unprecedented Times
by Dave Grace and Elisabeth Rhyne
During the economic slowdown in response to the novel coronavirus, the position of financial institutions is in some ways analogous to that of medical workers fighting the virus—without the health risk. Financial institutions have a duty to help their clients, even though doing so exposes them to increased risk. This is especially true for microfinance institutions, financial cooperatives and other bankers who serve lower income and vulnerable people. For these providers, taking steps to help customers like forgiving loans or offering payment holidays potentially threatens their own survival. Financial institutions are asked to support their small business and household customers through this unprecedented situation, even while their own solvency is challenged.