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Building consumer demand for digital financial services – the new regulatory frontier

Author

Listed:
  • Buckley, Ross P.

    (University of New South Wales)

  • Malady, Louise

    (University of New South Wales)

Abstract

Digital financial services (DFS) are held out as key financial solutions for improving financial inclusion. However, targeted end users often offer little in the way of obvious profitable opportunities and so market forces alone are not enough to ensure the supply of services and products that match end users’ means, needs or wants. As a result, DFS in emerging markets may suffer from limited uptake and usage, with little effect on financial inclusion. In emerging markets, financial regulators have been focusing on supporting the success of DFS largely through institutional and regulatory framework efforts. This article argues that financial regulators must first work to understand and build consumer demand for DFS rather than purely focusing on developing enabling regulatory frameworks. This requires a change in mindset for financial regulators, who are more familiar with promoting financial stability, safety and efficiency. In this article, we explore this changing role for financial regulators. We recommend that regulators particularly focus on building consumer demand through promoting partnerships in DFS as a means of promoting financial inclusion. We highlight that partnerships introduce collaboration risks and heighten consumer risks; requiring regulators to adjust regulatory frameworks to ensure such risks are identified and mitigated.

Suggested Citation

  • Buckley, Ross P. & Malady, Louise, 2015. "Building consumer demand for digital financial services – the new regulatory frontier," Journal of Financial Perspectives, EY Global FS Institute, vol. 3(3), pages 122-137.
    • Handle: RePEc:ris:jofipe:0091
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    Citations

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    Cited by:

    1. Calderon,Cesar & Cantu,Catalina, 2021. "The Impact of Digital Infrastructure on African Development," Policy Research Working Paper Series 9853, The World Bank.
    2. Paola Argüello Kalpa & María Alexandra Ortiz Cabrera, 2020. "Colección Enrique Low Murtra. Tomo XIII, Derecho económico," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1274, march.
    3. Iheanachor, Nkemdilim & Umukoro, Immanuel, 2022. "Partnerships in digital financial services: An exploratory study of providers in an emerging market," Journal of Business Research, Elsevier, vol. 152(C), pages 425-435.
    4. Muhammad Mohiuddin & Marian Matei & Samim Al-Azad & Zhan Su, 2022. "ICTs in Knowledge Sharing and Organization Culture: Case Study of a Center for Continuing Education," International Journal of Knowledge Management (IJKM), IGI Global, vol. 18(1), pages 1-19, January.
    5. Sarika Lohana & Deepankar Roy, 2023. "Impact of Demographic Factors on Consumer’s Usage of Digital Payments," FIIB Business Review, , vol. 12(4), pages 459-473, December.
    6. Ozili, Peterson K, 2020. "Comparing digital finance in the UK, US, India and Nigeria," MPRA Paper 104498, University Library of Munich, Germany.

    More about this item

    Keywords

    Digital financial services; regulations;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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