CEMC refers to policies and practices designed to promote stable and inclusive financial services via two interconnected pillars:

• Empowering consumers to make more informed financial decisions via the provision of information, education and effective avenues for redress;
• Protecting consumers via effective regulation, supervision and enforcement of market conduct by financial services providers (FSPs).

CEMC policies deliver two important and linked outcomes in relation to financial inclusion. First, they increase the potential for FSPs to extend access and choice to groups that are currently underserved or unserved via, for example, new products and services, alternative delivery channels or innovative technologies. Second, they have the potential to improve the quality of products available in the market to ensure that financial inclusion delivers meaningful benefits to consumers. Without this approach, consumers engaging with financial services for the first time are at significant risk of falling prey to poor quality or unsuitable products, resulting in an erosion of income due to unexpected costs and charges, punitive terms and conditions, over-indebtedness, loss of savings, damage to credit history and repossession of goods and assets.

Parallel global trends in CEMC include behavioral economics, consumer protection around big data and cybersecurity, digitally delivered products and services, measuring of the effectiveness of financial literacy and education programs, market conduct and risk-based supervision, and regulatory technology.

CEMC and gender

CEMC also has relevance for gender policies. Only 5 percent of AFI members surveyed perceived that they had gender-sensitive consumer protection mechanisms in place. As such, identifying the differential consumer protection needs for women and men can be important for regulators to meet their consumer protection role.