Emerging Risks to Consumer Protection: Key Findings in Colombia
In this research on emerging consumer risks in branchless banking commissioned by CGAP, we sought to answer the questions: What problems with branchless banking and mobile financial services models put consumers at risk in Colombia? What can be done to mitigate these risks while still encouraging innovation in the financial markets that serve the poor?
To understand the perspectives of providers and regulators on consumer protection in digital finance, we interviewed representatives of primary banks that offer digital financial services in Colombia, as well as regulators, industry associations, and an agent aggregator. The interviews were conducted between 28 July and 15 August 2014. The purpose of the interviews was to uncover new risks to clients from branchless banking and digital financial services, and to understand what providers and policy makers are doing to protect customers.
On the demand side, we used a combination of individual in-depth interviews and focus group discussions to explore client concerns about agent- and mobile-driven financial services delivery. Respondents were selected from two urban areas of Bogota (Rafael Uribe and Ciudad Bolivar) and two peri-urban areas on the outskirts of Bogota (Usme and Bosa)—all are low-income neighborhoods. Our methodology used exploratory techniques with a small sample, rather than an investigation of the prevalence of problems in a wider sample of the population. This approach provides a window into the frequency and severity of problems that urban low-income populations experience with agents and mobile money.