As data becomes central to the provision of formal financial services to the poor, the implications for customer protection are getting clearer. As noted in a CGAP report, Customer Empowerment in Finance, research shows that choice, respect, voice, and control are the cornerstones of customer empowerment for all customers (including low-income customers) in their use of and engagement with digital financial services. The CGAP team also takes a deep dive into the issues of Consumer Protection in Digital Credit, a must read for regulators and credit providers.The findings in these reports tie in neatly with the recommendations made in the report of the Household Finance Committee for India.
Finally, on August 24th, the historic judgement by the Supreme Court of India holding privacy to be a fundamental right has clear implications for data sharing and digital identity. While, the Supreme Court will take up the hearing in the PILs against Aadhaar in November, India has a chance now to lead the world in bringing stringent data protection and privacy legislation. It is time for the government and private sector to move away from the current model of “informed consent” towards setting clear parameters for the collection, use, processing, sharing, and security of personal information. Read more on this by Katherine Kemp, “Financial inclusion and the right to privacy” (Mint, August 29, 2017).