{"id":30813,"date":"2018-06-10T17:15:06","date_gmt":"2018-06-10T17:15:06","guid":{"rendered":"http:\/\/cfi.accion.flywheelsites.com\/?p=30813"},"modified":"2018-09-17T03:19:39","modified_gmt":"2018-09-17T03:19:39","slug":"celebrating-100-smart-certified","status":"publish","type":"post","link":"https:\/\/content.centerforfinancialinclusion.org\/celebrating-100-smart-certified\/","title":{"rendered":"Celebrating 100 Smart Certified Financial Institutions"},"content":{"rendered":"
The Smart Campaign is thrilled to\u00a0announce\u00a0100 financial service providers have attained Smart Certification, a landmark event for consumer protection in the financial inclusion industry. These institutions, collectively serving over 42 million clients, have done the hard work of examining and improving their own practices to embed client protection into their DNA. The momentum for certification signals that the industry increasingly values client protection not only for the sake of their client base, but also because certification improves their business.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Smart Campaign is thrilled to\u00a0announce\u00a0100 financial service providers have attained Smart Certification, a landmark event for consumer protection in the financial inclusion industry. These institutions, collectively serving over 42 million clients, have done the hard work of examining and improving their own practices to embed client protection into their DNA. The momentum for certification […]<\/p>\n","protected":false},"author":62,"featured_media":30817,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"regions":[],"series":[],"types":[3125],"client":[],"topics":[46],"personas":[],"institutional_partnerships":[],"clients":[],"program_teams":[3383],"acf":{"types":{"term_id":3125,"name":"Video","slug":"video","term_group":0,"term_taxonomy_id":3125,"taxonomy":"types","description":"","parent":0,"count":8,"filter":"raw"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":"Over 100 financial institutions, have been certified for adhering to the Campaign\u2019s industry-accepted consumer protection standards."},"post_default":{"description":""}},"authors":false,"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":[{"acf_fc_layout":"video","title":"100 Smart Certified","subtitle":"","video_url":"https:\/\/player.vimeo.com\/external\/288544849.hd.mp4?s=79d107f4adf9e5c47a33dc994c0f838e4779bdd1&profile_id=175","cover_image":"https:\/\/content.centerforfinancialinclusion.org\/wp-content\/uploads\/sites\/2\/2018\/09\/Smart-100.png","cover_image_url":""}],"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""},"related_content":{"cards":[{"ID":46595,"post_author":"87","post_date":"2024-02-21 18:35:21","post_date_gmt":"2024-02-21 22:35:21","post_content":"
While the digitalization of finance expands access and opportunities, it also exposes people to heightened financial risks, including fraud and predatory practices.<\/span><\/blockquote>\r\nIn large part due to the widespread adoption of digital financial services, the <\/span>Global Findex 2021<\/span><\/a> highlighted a significant milestone: 76 percent of the global population now has an account at a financial institution. While the digitalization of finance expands access and opportunities, it also exposes people to heightened financial risks, including fraud and predatory practices. <\/span>Research<\/span><\/a> shows an escalation in consumer protection risks accompanying the rise in digitalization, including cyber threats. It is crucial for businesses and policymakers committed to inclusive finance to acknowledge the immediate need for robust cybersecurity measures.<\/span>\r\n\r\nCFI\u2019s approach to consumer protection focuses on reducing consumer vulnerabilities, whenever they arise. These vulnerabilities can be classified using a <\/span>vulnerability framework<\/span><\/a>, and help identify who is least equipped to deal with the shock. Cyber threats, due to their nascent and dynamic nature, can create a complex intersection of vulnerabilities, affecting those who are most at risk. In this context, cybersecurity measures implemented by institutions and raising awareness among users are both equally important steps to safeguard individuals and institutions and prevent systemic risks.<\/span>\r\nRisks of <\/span>Cyber Threat<\/span>s in Inclusive Finance<\/span><\/span><\/h1>\r\nThe landscape of cyber threats has grown substantially more complex. We\u2019re now facing a wide array of dangers, including <\/span>ransomware<\/span><\/a>, <\/span>phishing<\/span><\/a> and its derivatives like <\/span>Smishing<\/span><\/a>, <\/span>vishing<\/span><\/a>, and <\/span>Qshing<\/span><\/a>, <\/span>Distributed Denial of Service (DdoS)<\/span><\/a> attacks, and supply chain infiltrations. These threats expose critical vulnerabilities that can disrupt operations, undermine the integrity of financial institutions, compromise sensitive data, and significantly erode consumer trust. Such risks not only threaten security but also contribute to driving consumers away from the digital economy.<\/span>\r\n\r\nThe increasing prevalence and sophistication of cyber threats are highlighted by a series of high-profile incidents across the globe. <\/span>In 2016,<\/span> in an <\/span>attack on the Central Bank of Bangladesh<\/span><\/a>, cyber-threat actors attempted to steal nearly $1 billion from a Federal Reserve Bank of New York account that belonged to the Bangladeshi central bank; however, the attack was thwarted and losses were largely minimized. Years later, in August 2023, <\/span>the Central Bank of Bangladesh received threats<\/span><\/a> that caused them to halt several internal online services to prevent another potential cyberattack. A DDoS attack targeting a Ukrainian investment company<\/a> led to severe disruptions in website connectivity, and the cyber incidents plaguing Uganda's largest mobile money networks, MTN and Airtel, resulted in a crippling four-day halt in service transactions.<\/span>\r\n
Cyber threats expose critical vulnerabilities that can disrupt operations, undermine the integrity of financial institutions, compromise sensitive data, and significantly erode consumer trust.<\/span><\/blockquote>\r\nIn addition to high-profile cases, many cyber threats targeting fintechs and small financial institutions go unnoticed in the media, but their impact is significant. <\/span>For instance, in Africa, the financial sector is increasingly recognizing cybercrime as a <\/span>major risk<\/span><\/a>. In a notable case, the Bluebottle cybercrime group's targeted attacks against financial institutions in <\/span>Francophone African countries<\/span><\/a> have caused financial losses totaling millions over four years, using methods that are accessible and less sophisticated. In Latin America, the situation is equally concerning. The region saw an estimated 137 billion <\/span>cyber attack attempts<\/span><\/a> in just the first half of 2022, with ransomware being a prevalent threat. SMEs often lack comprehensive security measures and have become prime targets as they digitalize.<\/span>\r\n\r\nThe diversity of cybersecurity incidents and their associated risks\u2013 including fraud, data misuse, transparency deficits, and a lack of resilience mechanisms \u2013 have a direct, negative impact on inclusive finance efforts, affecting both financial institutions and consumers. Findings from the <\/span>Global COVID-19 FinTech Market Rapid Assessment Study<\/span><\/a> indicate a rapid escalation in the perception of cyber risks across surveyed financial products which erodes trust, an already <\/span>scarce feature of financial services<\/span><\/a>. Data breaches are taking <\/span>longer to identify and contain<\/span><\/a>, and are only likely to increase with <\/span>AI-powered attacks<\/span><\/a>. Furthermore, low digital literacy among users leads malicious actors to take advantage of consumers. <\/span>Rural DFS users<\/span><\/a> have been systematically targeted through deceptive calls and messages, coercing fund transfers for false overpayments. <\/span>In Kenya, the rise of mobile banking has significantly increased the number of <\/span>fraudulent<\/span><\/a> actors and cyber criminals since 2016.<\/span>\r\n\r\nThese increased attacks on lower socioeconomic groups living in rural areas are largely due to two factors:<\/span>\r\n\r\n \t
- \r\n
The lack of affordable, secure hardware and software places lower socioeconomic groups at heightened risk; and<\/span><\/h4>\r\n<\/li>\r\n \t
- \r\n
Cybercriminals have capitalized on the confusion that often surrounds regulations related to cybersecurity specifically and digital services more broadly.<\/span><\/h4>\r\n<\/li>\r\n<\/ol>\r\nThis second issue is exemplified by incidents in <\/span>Ghana<\/span><\/a> where public unawareness of tax collection mechanisms facilitated fraudulent account information collection. These cyberattacks, beyond the immediate financial repercussions, erode trust in financial institutions and the expanding digital economy. Moreover, attacks targeting vulnerable communities ripple through the interconnected financial system, posing a systemic risk.<\/span>\r\n
What Is Needed to Fight Cyber Threats in DFS<\/span><\/span><\/h1>\r\nThe evolving DFS landscape calls for a proactive and multi-faceted approach to strengthen cybersecurity and protect users from evolving cyber threats. To date, several initiatives and strategies have emerged to address these challenges. In Africa, <\/span>USAID<\/span><\/a> and the Federal Trade Commission are collaborating to bolster an enabling environment for consumer protection in the African digital economy. Though its primary focus lies beyond cybersecurity, the effort aims to reinforce regulations and capacity building for authorities. Additionally, CGAP launched the <\/span>DFS Consumer Protection Laboratory<\/span><\/a> which works on cooperative approaches to combat DFS fraud and champion a more consumer-centric approach.<\/span>\u00a0<\/span>\r\n
Consumer protection by design involves thinking of consumer protection at the time of designing products and services, and not as an afterthought.<\/span><\/blockquote>\r\nHowever, more work is needed to safeguard people from cyber harms that risk excluding them from the benefits of the digital economy. Adopting a human-centric approach to cybersecurity could help address the issues of the most vulnerable. Consumer protection by design, an approach championed by CFI, akin to <\/span>privacy by design<\/span><\/a> and <\/span>secure by design<\/span><\/a>, involves thinking of consumer protection at the time of designing products and services, and not as an afterthought. This means taking proactive measures to safeguard users\u2019 financial well-being in an increasingly digitalized financial landscape, and collaborating with multiple stakeholders- regulators, product and service designers and funders to develop protection-by-design principles that can be integrated into the design of financial systems.<\/span>\r\n\r\nOne example of this type of collaboration is the <\/span>CyberPeace Builder\u2019s Program<\/span><\/a> which fosters cooperation and addresses cybersecurity issues in digital finance. This collaborative approach, underscored by the involvement of NGOs like <\/span>Bridges to Development<\/span><\/a> which aligns charitable investments with cybersecurity goals, signifies a collective stride toward bolstering cyber resilience and fostering a secure digital financial landscape for all users.<\/span>\r\nConclusion<\/span><\/span><\/h1>\r\nHuman-centric approaches have long been touted as a path to build greater customer centricity when designing financial services. However, their use in the field of cybersecurity is relatively nascent. The increasing complexity of digital financial services and the pace driving inclusion demands a collaborative, human-centered approach to address growing risks. We need collective action to address the risks that will emerge as we traverse this digital frontier \u2013 the responsibility lies on all of us to ensure the outcomes of responsible digital finance.<\/span>","post_title":"Cybersecurity: A Crucial Ingredient for Responsible Finance and Consumer Protection","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"cybersecurity-a-crucial-ingredient-for-responsible-finance-and-consumer-protection","to_ping":"","pinged":"","post_modified":"2024-01-30 11:09:57","post_modified_gmt":"2024-01-30 15:09:57","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?p=46548","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/content.centerforfinancialinclusion.org\/wp-content\/uploads\/sites\/2\/2024\/01\/iStock-1422766384.jpg","acf":{"types":{"term_id":3123,"name":"Blog Post","slug":"blog-post","term_group":0,"term_taxonomy_id":3123,"taxonomy":"types","description":"","parent":0,"count":2202,"filter":"raw"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":"Cybersecurity has become a critical pillar of consumer trust and a key enabler of equitable financial inclusion. In collaboration with CyberPeace Institute, we explore the risks of cyber threats in inclusive finance and what is needed to responsibly address them."},"post_default":{"description":""}},"authors":[{"ID":46549,"post_author":"87","post_date":"2024-01-10 16:15:30","post_date_gmt":"2024-01-10 20:15:30","post_content":"","post_title":"Francesca Bosco","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"francesca-bosco","to_ping":"","pinged":"","post_modified":"2024-01-10 16:15:30","post_modified_gmt":"2024-01-10 20:15:30","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=46549","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":44414,"post_author":"87","post_date":"2022-05-02 10:12:27","post_date_gmt":"2022-05-02 14:12:27","post_content":"","post_title":"Edoardo Totolo","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"edoardo-totolo","to_ping":"","pinged":"","post_modified":"2022-05-02 15:40:32","post_modified_gmt":"2022-05-02 19:40:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=44414","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":"https:\/\/content.centerforfinancialinclusion.org\/wp-content\/uploads\/sites\/2\/2024\/01\/Cybersecurity-Preview.png","description":""}},"url":"cybersecurity-a-crucial-ingredient-for-responsible-finance-and-consumer-protection"},{"ID":46537,"post_author":"87","post_date":"2023-12-19 12:30:54","post_date_gmt":"2023-12-19 16:30:54","post_content":"As the inclusive finance sector evolves with a heightened focus on technology and climate, so too do the concepts and ideas that most captivate our attention. Over the course of 2023, emerging terms such as digital public infrastructure (DPI), green inclusive finance, and generative AI, all unknown to the sector just a couple of years ago, have swiftly moved to the forefront of the most crucial discussions in inclusive finance today.\r\n\r\nYet, as some topics rise to prominence, others, although equally important, are often pushed to the sidelines. Unfortunately, gender often falls victim first; as Melinda French Gates points out<\/a>, \u201cWhen the global agenda gets crowded, gender equality is one of the first items to fall off.\u201d <\/em>A distressing picture painted by the UN Women's recent report reveals<\/a> that more than 340 million women and girls could be living in extreme poverty by 2030.\r\n\r\nAnd then there are agendas that have always been right in front of our eyes, but that somehow never seem to get enough attention. The concept of \"stability entrepreneurs,\" as revealed in the Small Firm Diaries<\/a>, has long been part of our collective knowledge, but is often overshadowed by the thrilling pursuit of tech disruptions and unicorns. Focusing on \"stability entrepreneurs\" could reignite the important, but recently overlooked, conversation on resilience in micro and small enterprises<\/a>.\r\n\r\nIt is critical that those of us in the development sector balance our chase for groundbreaking advancements with the essential needs and realities of the millions of people whom we aim to serve. We must remember not to allow the pursuit of market-centric glory to sidetrack our real focus:\r\n
Are we truly leveraging finance to fight global poverty, or just repackaging old business models in new, more appealing wrappers?<\/strong><\/h4>\r\nThis reflection is essential as we introduce and prioritize new concepts for next year. Here are three new concepts that I believe warrant the heightened focus as we go into 2024.\r\n
The Digital Public Infrastructure Debate: Frank Conversations Beyond the Hype<\/strong><\/h1>\r\n2023 saw a dramatic shift in the discourse surrounding digital public infrastructure (DPI). Central to the DPI debate is the \u2018India Stack,\u2019 a multifaceted, multi-layered, and fast-growing tech infrastructure. In particular, the Unified Payment Interface (UPI) model in India, has received both accolades and criticism this year.\r\n
Inefficiencies are already emerging, and addressing them promptly and adopting more participatory approaches with both citizens and the private sector will be essential.<\/blockquote>\r\nDPI is a series of building blocks for digital transactions that the state develops for foundational systems (like UPI), much like government-built roads used by both private and public transport. DPIs help to facilitate initiatives like the Open Network for Digital Commerce<\/a> (ONDC) in India for small businesses that are not included in large digital platforms. As DPI becomes front and center in development, it's becoming increasingly likely that we'll encounter many questions and challenges related to the role and incentives associated with state-backed and state-run initiatives. Inefficiencies are already emerging, and addressing them promptly and adopting more participatory approaches with both citizens and the private sector will be essential.\r\n\r\nThis year, CFI will be spearheading global discussions around DPIs through its work with the Responsible Finance Forum (RFF)<\/a>. Mid-year 2024, RFF will have a key advisory group meeting in Brazil alongside the G20 meeting of the GPFI. While there, critical questions we hope to address include: What are models of DPI that are emerging, and what are the pros and cons associated with each? And what is the long-term viability of each model?\r\nThe Data Economy: Rethinking Data Governance Beyond Open Banking<\/strong><\/h1>\r\nAs we delve into the intricacies of DPI, another dimension comes into play: the governance of the data economy which is closely tied to but separate from the conversations around DPI.\r\n\r\n'India Stack', the most cited in the context of DPI, includes several layers \u2013 the Data Empowerment and Protection Architecture (DEPA)<\/a> layer being the most recent and also the least understood. The DEPA layer encompasses critical elements of data exchange and protection. It is still unknown whether this component of India's DPI will replicate UPI's success, or if alternative models to data governance, such as the European Union\u2019s \u201ccommon data spaces<\/a>\u201d \u2014 where open finance is interlinked with eight other real economy data spaces \u2014 or Australia\u2019s \u201cconsumer data right<\/a>\u201d approach, will emerge as global exemplars.\r\n\r\nFrom a financial inclusion perspective, individuals who lack data trails are left out of open banking. This holds true for account aggregators in India as well; the underbanked or excluded simply don't have data to contribute, meaning that they will continue to be left out of formal banking systems. It's time for a strategic shift towards data exchanges that mirror the economies of the poor. We need to focus on sectors like telecommunications, agriculture, mobility, small trade, and utilities. Today, although these areas offer crucial data points for exchange, they still remain conspicuously absent from the scope of current open banking.\r\n\r\nHeading into 2024, it's essential to overcome compartmentalized strategies in the data economy. A key goal should be to connect open banking with the broader data landscape. Emphasizing learning and policy development, we should draw on global experiences to shape inclusive data governance frameworks. This involves engaging in policy dialogues and adapting lessons from various models to meet the evolving needs of the digital economy and its diverse participants.\r\n
The Great Reckoning: Fintech's Limits in Addressing Climate Crisis<\/strong><\/h1>\r\nWe would be remiss to end a blog on 2023 without speaking of climate. COP28 not only emphasized the urgent environmental realities but also agreed on a significant shift away from fossil fuels<\/a>. This decision underscores the immediate challenges we face: the potential displacement of millions due to climate change effects is no longer a distant threat, but rather a present-day challenge.\r\n\r\nDespite the Intergovernmental Panel on Climate Change (IPCC) issuing warnings about environmental migration since the early nineties<\/a>, disentangling the complex web of social, political, economic, and now increasingly, climatic factors driving migration is challenging<\/a>. However, it's evident that climate change is more and more becoming a significant push factor. The Internal Displacement Monitoring Centre is telling: annually, tens of millions are displaced by natural disasters, often surpassing those displaced by conflicts. In 2022 alone, over were recorded due to disasters, with a significant impact on the world's poorest regions.\r\n
As we navigate this landscape, it's crucial that we align our financial strategies and innovations with the real and pressing needs of the most vulnerable populations.<\/blockquote>\r\nThis reality amplifies the urgency discussed at COP28, where it became clear that fintech alone is insufficient to tackle the climate crisis. The establishment of the Loss and Damage Fund<\/a>, aimed at aiding climate-vulnerable developing countries and backed by countries like Germany and the UAE, marks progress but also underlines the significant gap between global needs and the actions taken. The focus must now extend beyond traditional financial solutions to address the needs of those most affected by climate change, as underscored in CFI's Green Inclusive Finance framework<\/a>.\r\n\r\nDeveloping and emerging nations are on the frontline of climate impact, grappling not just with the environmental fallout but also with the human cost of displacement and migration. As we navigate this landscape, it's crucial that we align our financial strategies and innovations with the real and pressing needs of the most vulnerable populations.\r\nLooking Ahead: Embracing Open Debate and Change<\/strong><\/h1>\r\nAs we step into 2024, we face a financial landscape rife with contradictions and challenges. The DPI debate embodies the tension between incentives of state-led infrastructure, private sector innovation, and citizen\u2019s participatory approaches. The evolving data economy prompts a reevaluation of governance and consumer rights. And the environmental crisis forces us to question the role of fintech in achieving sustainable goals.\r\n\r\nInclusive finance, at its core, must adapt to these changing paradigms and seek solutions that are not only innovative but also equitable and sustainable. The road ahead is fraught with controversies and difficult questions, but it is only through embracing these challenges that we can hope to build a more inclusive financial system. I look forward to what we can accomplish and how we can move the needle in 2024.","post_title":"Year in Review, Future in Focus: The Evolving Tale of Inclusive Finance","post_excerpt":"","post_status":"publish","comment_status":"open","ping_status":"open","post_password":"","post_name":"year-in-review-future-in-focus-the-evolving-tale-of-inclusive-finance","to_ping":"","pinged":"","post_modified":"2023-12-19 12:32:00","post_modified_gmt":"2023-12-19 16:32:00","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?p=46537","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw","featured_image":"https:\/\/content.centerforfinancialinclusion.org\/wp-content\/uploads\/sites\/2\/2023\/12\/iStock-1389848482.jpg","acf":{"types":{"term_id":3123,"name":"Blog Post","slug":"blog-post","term_group":0,"term_taxonomy_id":3123,"taxonomy":"types","description":"","parent":0,"count":2202,"filter":"raw"},"header":{"header_type":"post_aligned","post_cover":{"description":""},"post_aligned":{"description":"As the year comes to an end, CFI's VP of Research and Programs, Edoardo Totolo, reflects on recent trends in the inclusive finance sector and what we should prioritize looking ahead."},"post_default":{"description":""}},"authors":[{"ID":44414,"post_author":"87","post_date":"2022-05-02 10:12:27","post_date_gmt":"2022-05-02 14:12:27","post_content":"","post_title":"Edoardo Totolo","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"edoardo-totolo","to_ping":"","pinged":"","post_modified":"2022-05-02 15:40:32","post_modified_gmt":"2022-05-02 19:40:32","post_content_filtered":"","post_parent":0,"guid":"https:\/\/content.centerforfinancialinclusion.org\/?post_type=people&p=44414","menu_order":0,"post_type":"people","post_mime_type":"","comment_count":"0","filter":"raw"}],"meta_cta":{"download":false,"cta_button_text":"","cta_media":false,"cta_url":"","additional_links":false},"blocks":false,"page_settings":{"":null,"email_sign_up":true,"show_related_content":true,"show_contextual_menu":false,"contextual_menu_cta":null,"replace_global":false,"hide_sticky_share":false,"hide_date_when_featured":false,"is_list_view":false,"premium":false,"preview_image":false,"description":""}},"url":"year-in-review-future-in-focus-the-evolving-tale-of-inclusive-finance"},{"ID":46388,"post_author":"87","post_date":"2023-09-14 12:26:50","post_date_gmt":"2023-09-14 16:26:50","post_content":"
\u201cWomen don\u2019t need to be educated \u2013 bankers do!\u201d<\/b>\r\n<\/span>-- Chetna Sinha, Founder\/Chairperson, Mann Deshi Bank<\/span><\/i><\/blockquote>\r\nThis quote by Chetna Sinha from Mann Deshi Bank became one of the defining comments at the <\/span>July 2023 convening<\/span><\/a> of the <\/span>Responsible Finance Forum (RFF)<\/span><\/a> that took place in Bengaluru, India. The RFF, a global convening platform on responsible inclusive finance, met in person for the first time in four years, bringing together leaders from around the world to discuss key issues in responsible finance. Sinha\u2019s comment, made during one of the <\/span>featured panel discussions<\/span><\/a>, highlights the importance of understanding and addressing the normative and structural barriers that keep women excluded and underserved in the financial sector. We need to invest more in understanding the unique risks women face and ensuring product design and redress mechanisms help to mitigate these risks, especially for digital financial services (DFS). The reality is, it's not so much about changing women\u2019s behavior, rather, it's about changing the system.<\/span>\r\nWe need to invest more in understanding the unique risks women face and ensuring product design and redress mechanisms help to mitigate these risks, especially for digital financial services<\/span><\/blockquote>\r\nWhile the proliferation of DFS has substantially increased inclusion, this increase has also expanded the scope and impact of <\/span>risks<\/span><\/a> including fraud, data misuse, a lack of transparency, and inadequate redress mechanisms. These risks are especially high for women; women tend to be less digitally literate and, as a result, the impact of fraud and other data issues are different and more consequential than for men. And because women are more vulnerable, they have less capacity to cope, and recurring shocks lead to lower resilience and a reduced ability to recover. Research conducted by <\/span>CGAP in Cote d\u2019Ivoire<\/span><\/a> found that women were more likely to lose money to scams (16 percent of women compared with 12 percent of men), have more difficulty navigating product menus on their phones (25 percent of women compared with 17 percent of men), and were less likely to understand digital financial products (22 percent of women compared with 18 percent of men)<\/span>.<\/span> Given these greater risks, it was heartening to see that the vital need to include women and, importantly, suggestions on how to more safely include them, was a frequent topic of discussion throughout the RFF convening.<\/span>\r\n\r\nIt is interesting to note that in 2009 when the RFF <\/span>was conceptualized<\/span><\/a> as a forum for investors, donors, financial services providers, and sector experts, the original consultation draft referred to the need for \u201ccoordinated public and private sector interventions that encourage and assist FSPs and their clients in improving their understanding and approaches, practices, and behaviors that can eventually contribute to creating more <\/span>transparent<\/span><\/i><\/b>, <\/span>inclusive<\/span><\/i><\/b>, and <\/span>equitable<\/span><\/i><\/b> financial markets\u201d. If inclusion has been part of responsible finance from the start, why then are we not overtly and proactively focusing on including women?<\/span>\r\nWhy Are DFS Risks Greater for Women?<\/h1>\r\nFor the most part, digital financial products and services do not take into account the difference in women\u2019s needs and capabilities relative to men\u2019s, thereby increasing the risk to women of <\/span>exclusion<\/span><\/a> and misuse. If we do not urgently address these risks, many of the recent gains in increasing women\u2019s inclusion could be lost.<\/span>\r\n
A growing digital divide.<\/span><\/b><\/h4>\r\nDue to pervasive gender norms, women are left out of the system more than men \u2013 many do not have formal identification and\/or do not own their own phone which results in lower digital and financial capability, and consequently different and smaller data trails. <\/span>GSMA\u2019s fourth <\/span>mobile gender gap report<\/span><\/a> shows that <\/span>women\u2019s digital inclusion is slowing across low- and middle-income countries for the second consecutive year, indicating worrying gender gaps in mobile phone ownership and usage, internet usage, digital skills and awareness, and adoption of digital innovation.<\/span>\r\n
Given that women are not well represented in use cases and data scientists do not research women\u2019s experiences, they are often excluded or underserved resulting in reduced economic opportunities <\/span>and other challenges.<\/span><\/blockquote>\r\nProduct design often excludes women.<\/span><\/b><\/h4>\r\nWhile the increasing use of algorithms and artificial intelligence (AI) is allowing service providers to reach and serve more people than ever before, because historical data is used to train AI models and the differences between women and men are usually not considered in the design of AI, <\/span>there is often an <\/span>algorithmic bias against women<\/span><\/a> in financial models. Given that women are not well represented in use cases and data scientists do not research women\u2019s experiences, they are often excluded or underserved resulting in reduced economic opportunities <\/span>and other challenges, ultimately perpetuating gender inequality.<\/span>\r\n
Inadequate redress mechanisms and analysis.<\/span><\/b><\/h4>\r\nWomen tend to have less experience using DFS than men. They also tend to have less voice and agency, which translates to less confidence in using redress and complaint systems. Even when they do file a complaint, they may lack the resources to be able to wait for resolution. <\/span>CGAP\u2019s research<\/span><\/a> in Cote d\u2019Ivoire found that <\/span>women are less likely to contact a provider if there is a problem<\/span><\/a> (10 percentage points) and to know how to do this (5 percentage points). In addition, agents were 9 percentage points less likely to act on a woman\u2019s complaint. Furthermore, there is a lack of data to understand how data breaches impact women compared to men.<\/span>\r\n
So, What is Needed?<\/h1>\r\nHow can we address the risks that digital financial services pose for women to create a more inclusive, fair, and <\/span>equitable digital financial system<\/span><\/a>? And in doing so, be truly \u201c<\/span>responsible\u201d? Below are several suggested areas for focus:<\/span>\r\n
1. Better information and understanding of women and the constraints to using DFS.<\/span><\/b><\/h3>\r\nWe need a greater understanding of the needs, experiences, capabilities, and preferences of women, as well as the unique constraints they face. To go back to Chetna Sinha\u2019s comment, our focus should be on educating bankers, not women. Providers need to understand what impacts women\u2019s ability to access DFS \u2013 including mobility constraints, digital and financial literacy, mobile phone ownership, low bargaining power, income limitations, privacy issues, etc., and consider the overall context of women\u2019s lives \u2013 their age, marital and parental status, geography, education, health, income, etc. when designing and delivering financial services.<\/span>\r\n\r\nTo do this, primary and secondary research is needed. This means speaking to female clients and potential clients about their financial needs, and how they use financial services or why they do not use them. It also requires ongoing collection and analysis of financial service provider (FSP) portfolios, regulatory reports, complaints, and other data to identify and track risks that disproportionately affect women\u2019s use of DFS. And of course, underlying all of this, we need to understand and consider how gender norms impact the behavior of all actors in the system, not just women\u2019s behavior.<\/span>\r\n
2. Improved data and measurement of women's use of DFS and the benefits and risks.<\/span><\/b><\/h3>\r\nWe need a lot more and a lot better data, and we need to measure outcomes to know whether women are benefiting from using DFS.<\/span>\r\n
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- Demand data<\/b><\/em> (e.g., services used, satisfaction, outcomes, complaints, dormancy) <\/span>is key to understanding how women use and benefit from DFS, including higher income, economic empowerment, and increased agency. These data can also show the risks women face from using DFS; for example, increased intimate partner violence or reduced bargaining power in their households. To mitigate the risks that disproportionately affect women, we must track <\/span>consumer protection metrics<\/span><\/a> and women\u2019s use of, and effectiveness of, recourse mechanisms.<\/span><\/li>\r\n<\/ul>\r\n