Following the Financial Inclusion Policymakers Forum (FIPF), 28 participants from 18 countries launched the Consumer Empowerment and Market Conduct (CEMC) Working Group on 7 April in Kuala Lumpur, Malaysia.
The CEMC Working Group is the newest addition to AFI’s working groups bringing the total number to five within the network.
The CEMC Working Group provides a platform for AFI members to discuss emerging policy and regulatory issues about consumer protection and empowerment. The group’s aim is to promote the adoption of evidence based policy and regulatory solutions in these areas.
CEMC Working Group members agreed on four priorities. First, they agreed on the necessity for market conduct standards to enhance transparency of costs, terms and conditions of financial products and the related contracts. Second, market conduct standards on selling practices such as advertising, fairness, and product suitability were considered important for consumer protection. Third, the existence of procedures for consumer recourse and redress was prioritized. Finally, members acknowledged the need for financial education to empower consumers to make informed choices.
To foster the four key priorities and to facilitate the future effectiveness of the group, members set the next meeting to take place at the 3rd annual AFI Global Policy Forum (GPF) in Mexico this coming September. During the interim between the launch and the second meeting, six members (Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), Banco Central do Brasil, Reserve Bank of Malawi, State Bank of Pakistan, Bangko Sentral ng Pilipinas, and Bank of Zambia) will take responsibility for coordinating the Working Group’s activities. Then, a chair person will be elected at the September meeting. Other work in the meantime will consist of drafting a concept note, charter, and work plan. Also, a member survey will be conducted to identify the current and upcoming policy initiatives in the group’s four prioritized areas.
In the days prior to the CEMC Working Group launch, the FIPF event also saw progress on consumer protection and empowerment. Governor Zeti Akhtar Aziz of Bank Negara Malaysia pointed out that consumer protection is implicit within central banks’ mandates to create greater stability. Another point coming out of the discussions was that from a customer’s point of view, costs, trust, and awareness are barriers to financial inclusion. As a result, equipping customers with capabilities is essential. For policy makers to implement any of these initiatives, a broad based strategy must be pursued in conjunction with coordination and consultation of other government agencies and the private sector.
The AFI network prioritizes consumer empowerment and market conduct due to its connection with financial stability and sustainable financial inclusion, in turn benefitting national economies and consumers alike. AFI’s latest case study concerns Malaysia’s decade long effort at consumer empowerment and protection, and AFI Policy Champion Koid Swee Lian is the Director of Bank Negara Malaysia’s Consumer and Market Conduct Department.