Page 20 - ITU-T Focus Group Digital Financial Services – Executive Summary
P. 20
ITU-T Focus Group Digital Financial Services
Executive summary
3.2.4 Poor disclosure of pricing, fees, and terms and conditions
Poor disclosure of pricing, fees, and other terms and conditions leaves many customers unsure of the actual
cost of DFS and exposes them to fraudulent practices by agents and others. Information on pricing and fees
45
may be poorly disclosed and may be unavailable prior to executing a transaction. Key terms and conditions
may be hidden or phrased using complex language, and disclosure of terms and conditions is particularly
challenging on basic handsets or feature phones. For digital credit in particular, misunderstanding interest
rates and other charges, repayment requirements, and consequences of late or non-repayment can be costly.
Authorities should adopt measures to provide for meaningful disclosure of prices and terms and conditions.
They should: (i) require disclosure of fees prior to transaction completion; (ii) develop standard definitions for
costs and fees; and (iii) require providers to clearly disclose fees, charges, and other key terms and conditions
using simple language.
3.2.5 Data privacy and protection
Poor and unbanked consumers are typically unaware of how their personal data are used and protected.
46
Provisions governing data privacy and protection are often buried in terms and conditions that are only
comprehensible to lawyers.
Authorities should take steps to strengthen DFS consumer data privacy and protection. They should require
clear and informed consent from consumers regarding the collection and use of their personal data, along
with specific consent for any data use and sharing that does not fall within the scope of the original consent.
Authorities may also wish to establish specific requirements with respect to: (i) data security; (ii) notification of
customers in the event of a data breach; (iii) provider liability for failure to adopt reasonable security measures;
and (iv) retention limits for customers’ personal data. In addition, authorities may consider requiring DFS
providers to enable customers to: (i) access, verify, and correct their personal data; and (ii) transfer their data
to another provider upon request.
4 Understanding the DFS supply side (providers)
4.1 Which actors are involved in the delivery of DFS to poor and unbanked consumers?
Banks are key actors in the supply of DFS. In some countries, DFS provision is dominated by banks or their
subsidiaries. Even in markets where DFS provision is dominated by nonbank providers, banks play important
roles. For example, most countries require nonbank DFS providers to deposit customer funds in banks for
safekeeping, and some require nonbank DFS providers to select a bank to serve as the trustee responsible for
management of these funds. In addition, banks often facilitate access to agent liquidity, either informally or
through formal agreements. Furthermore, banks are increasingly partnering with nonbank DFS providers in
markets with high levels of DFS adoption to offer credit and savings services to DFS account holders.
In many markets, MNOs and their subsidiaries have taken a leading role in DFS delivery. In most developing-
country markets with high DFS uptake and usage, MNOs or their subsidiaries are directly licensed to issue
47
45 See, e.g., ITU Mystery Shopping Study; McKee et al. (2015), Doing Digital Finance Right: The Case for Stronger Mitigation of
Customer Risks, https:// www. cgap. org/ sites/ default/ files/ Focus- Note- Doing- Digital- Finance- Right- Jun- 2015. pdf.
46 For a discussion of how DFS transactional data, call data records, and other data are used to assess creditworthiness, see ITU
FGDFS Report (2017), Competition aspects of DFS.
47 See, e.g., Simone di Castri (2015), Is Regulation Holding Back Financial Inclusion? A Look at the Evidence, http:// www. gsma. com/
mobilefordevelopment/ programme/ mobile- money/ is- regulation- holding- back- financial- inclusion- a- look- at- the- evidence.
14
