Financial consumer protection

Protecting financial consumers, albeit normally a task for central banks/financial conduct authorities, should also be on the radar of competition authorities, who should ensure that DFS providers inculcate a consumer-focused culture in their organizations. A competitive market depends on consumers having fair access to pre-, peri- and post-shopping protection and tools. This includes:

1. finding high quality DFS in the market, such as payments that are instant, universal and accessible price-wise;
2. being able to compare products and their prices (with comparison websites and standardized services);
3. receiving broad and clear disclosure on marketing materials;
4. reaching complaint channels, redress mechanisms and liability measures; and
5. being protected from abusive or unfair clauses in contracts, discriminatory pricing or vulnerability exploits.

The growing offering of DFS through digital platforms demands that authorities look into demand-side issues also from the behavioral perspective, that is, how the design of the provider-consumer interface enables the platform owner (or his clients) to manipulate or steer the choices of customers. Choice architecture is an area relatively unknown to authorities in most jurisdictions, but its effects on competition and consumer protection are increasingly important. Thus, these authorities should aim for cooperation with other countries’ agencies or even the market, aiming to internalize this knowledge and build a skilled team that will then be able to adequately analyze, supervise and propose policy. Understanding user experience in digital ecosystems, behavioral biases and analyzing mass data will be key to assuring competitive DFS markets.