Opening remarks by Norbert Mumba, AFI Deputy Executive Director at the BNM-AFI Member Training on CEMC


10 July 2017, 10:00 AM

BNM -AFI Member Training on

Consumer Empowerment and Market Conduct


Kristina Rai, Human Capital Development Centre, BNM

Participants from AFI member institutions (some participants might be attending an AFI event for the first time)

Deputy Governor Mhlabuhlangene Dlamini, Central Bank of Swaziland

Colleagues from BNM and AFI


Welcome to the AFI-BNM training on Consumer Empowerment and Market Conduct. This is the fifth year of our partnership with BNM to deliver member trainings and we sincerely appreciate BNM’s support in co-hosting the trainings.

We have with us for this training 38 participants[1] from 25 countries and 27 institutions[2]. We thank you for such continued overwhelming response which is also a reflection of your institution’s commitment to building a safe financial environment for consumers.

In 2017, AFI is organising more than 20 capacity building events, which include Member Trainings, Joint Learning Programmes, Training under the Public Private Dialogue, Peer Advisory Initiatives for in country implementation of national financial inclusion strategies.

We have been continuously improving the content, design and delivery of our capacity building initiatives based on the feedback we receive from you. The overwhelming response that we receive from you for every capacity building event, we hope, is a reflection that we have been able to meet your emerging needs.

The most recent addition to our range of services is the introduction of the Online Course on “Certified Expert in Financial Inclusion Policy”, delivered in partnership with Frankfurt School of Finance and Management. The first session commences on 1 September 2017 and registration is now open. My colleague, Madhurantika, from AFI’s Capacity Building Unit, can provide you further details on the registration and discounted rates that are available for you.

Ladies and Gentlemen,

Protecting customers and ensuring they are treated fairly by financial institutions is the essence of market conduct policy. Indeed market conduct regulation aims to prevent (and manage where prevention fails) the dangers that arise from a financial institution conducting its business in ways that are unfair to customers or undermines the integrity of financial markets and confidence in the financial system. Emergency of market conduct regulations is on account that ordinary, generic customer protection laws have proved not enough in protecting financial customers. We need more tailored standards to applied consistently across the sector to ensure that the financial sector is adequately meeting customer needs.

Alternative Recourse mechanisms

Effective market conduct requires customers who are empowered to hold financial institutions to account. In addition to reforming the legal framework for regulating financial institutions, the approach to improving market conduct will also aim at improving customer recourse mechanisms in the financial services sector. This involves ensuring that dispute resolution mechanisms - in particular the ombuds system - are easily accessible and effective.

Strengthening financial literacy and capability

In addition to improved recourse mechanisms, improved market conduct requires financial customers who are informed and appropriately educated about financial services and products. This requires effective financial education initiatives to build customer capability

Market Challenges

  • Opaque and complex fee structures that undermine product comparisons and competitiveness, particularly fees relating to account transactions, penalties and ATM charges
  • Incentives and inducements reduce customer scrutiny of core product features and distort decision making
  • Insufficient focus on new customer channels emerging through new technologies, e.g. mobile banking and other emerging technologies such as fintech
  • Fraud risk, particularly through electronic channels
  • The sale of unsuitable and inappropriate credit products
  • Reckless lending practices that lead to over-indebtedness, especially payday lending
  • A multiplicity of fees and commissions that are often high and opaque, compounded by inadequate or poor disclosures to customers
  • Abuse of the payments system to collect debt.

AFI has been working on CEMC and our focus on it was confirmed with the setting up of the CEMC Working Group in 2011. The WG is a platform for policymakers to advance policy and regulatory issues related to consumer empowerment initiatives and market conduct regulations. It was launched to examine how consumer empowerment and protection can help to secure access to financial services and improve the quality of these services. The WG is presently working on developing a strategy for streamlining its initiatives.

Given the growing importance of CEMC, the WG has been focusing its work on specific areas of concern and it has in the process developed a number of knowledge products based on the experiences and learnings of the AFI members. A couple of examples of the recent work of AFI members are:

  1. The CEMC WG has published a risk based supervision framework which I trust you will find relevant.
  2. Digital financial services are indeed the way forward for financial inclusion especially in emerging economies. There is huge potential to extend the offering of financial services to cover savings, credit and insurance along with remittances and payments services. However, extension of such services also comes with critical risks, for example crisis due to over indebtedness in India, Morocco, Nicaragua, Bosnia, and South Africa, which has reinforced the need to develop sufficient market conduct regulatory and supervisory systems alongside innovative products such as digitally-delivered credit. Another publication by WG focuses on policy guidance on digitally delivered credit.

Financial education is an important pillar of CEMC and diverse initiatives have been taken by AFI members on this. The focus now is on assessing the impact – immediate outcomes of the initiatives and more importantly, the long-term impact on financial capabilities and the financial behaviour of consumers. In this area, we are now, based on AFI member feedback, incorporating newer approaches such as that of using behavioural economics for policy making.

During the next five days, you will be discussing these topics in detail in the next five days and you will be learning from external technical experts, AFI staff will be sharing their knowledge, our host BNM will present their experiences. Peer learning has been the cornerstone of AFI’s capacity building events, and thus we also look forward to hearing from each one of you. It is your active participation and contribution that will make the training most effective.

AFI team works continuously on improving the content, design and delivery of the capacity building events based on the feedback we receive from members and partners. And thus, we would truly appreciate if you would share your feedback, send us updates on how you used the learnings from the training or any questions that you might face while implementing the learnings. We are committed to bring change and that will happen only we are able to translate the learnings from events such as these to effective financial inclusion interventions.

I will conclude by thanking the BNM Team for once again rising to the occasion by putting up this JLP and indeed my colleagues from AFI. I thank you again for your participation at this event and wish you a week of fruitful learning.

[1] 11 participants are self-sponsored.

[2] Afghanistan, Armenia, Bangladesh (BB and MRA), Bhutan, Burundi, Cambodia, Costa Rica, El Salvador, Jordan, Kenya, Madagascar, Nepal, Palestine, Peru, Philippines, Senegal, Seychelles, Solomon Island, Swaziland (CB and MoF), Tajikistan, Uganda, Zambia, Zimbabwe, ASEAN (Myanmar, Vietnam).

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