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Global Standards Proportionality
Working Group (GSPWG)

Global Standards Proportionality
Working Group (GSPWG)

GSP Working Group is a platform that provides technical support to developing and emerging country policymakers to implement global standards for financial stability (e.g. the Basel Framework) and financial integrity (e.g. Financial Action Task Force (FATF) 40 Recommendations) proportionately and without unintended negative consequences for financial inclusion.

The working group supports AFI’s Global Standards and Policy Committee with respect to strategic engagements with global standard-setting bodies and leverages on AFI’s partnership with the FATF Style Regional Bodies and the International Association of Deposit Insurers.

Members also exchange information on the opportunities and risks associated with new technologies, such as digital identity innovations, regulatory technology solutions, and the growing use of virtual assets, which could potentially impact the effectiveness of global standards and regulatory compliance.

The working group has four thematic subgroups:

  • Anti-money laundering/combating the financing of terrorism – developing a toolkit on inclusive financial integrity;

  • Basel Framework – developing a guideline note on the proportionate application of the Basel Framework;

  • Deposit Insurance – developing an issues paper on e-money, financial inclusion and deposit insurance;

  • Non-bank financial institutions (NBFI) – advancing proportionate regulations of NBFIs active in the promotion of financial inclusion.


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Consumer empowerment is a broad concept, which places responsibility on regulators and financial services providers to make use of easier, safer financial services and of greater benefit to consumers. Market conduct policies are used by regulators to shape, enhance and balance these three factors (i.e., the institutional framework, as well as supply-side and demand-side factors) to create a more sustainable, fair and sound financial ecosystem for consumers.

While consumer protection has often been a priority for regulators, alongside financial stability, the developments in financial services have highlighted the need for ‘strengthened, dedicated proportionate policy action to enhance financial consumer protection’. At the launch of the AFI CEMC Working Group (CEMCWG), in April 2011, it was acknowledged that expansion and innovation in products, services and technology have, undoubtedly, delivered many economic benefits –globally expanding the reach of financial services and bringing more consumers, including some who have historically struggled to access the market, into financial services. Nevertheless, the CEMCWG also recognized that the causes and effects of the 2007 global financial crisis clearly demonstrated the risk that innovation can disregard legitimate consumer needs and expectations of fair and responsible treatment by financial services firms. As a result, some consumers remain excluded from the market altogether, while others have access only to poor quality financial products or FSPs that do not treat them fairly. Renewed emphasis on consumer empowerment is often referred to as an attempt to re-balance the focus of financial services regulation towards ‘demand-side’ factors – i.e. consumer needs, behaviours and outcomes. This is viewed as both essential and timely.

CEMC regulation is viewed by policymakers and regulators – across the world and in relation to a range of different markets – as offering potential to improve outcomes for individuals, in general, and, in particular, those who are vulnerable, but also as a route to supporting economic growth by promoting and stimulating healthy competition while, at the same time, reducing the cost and burden of regulation.

CEMC policies deliver two important 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 benefit 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 erosion of income due to unexpected costs and charges, punitive terms and conditions, over-indebtedness, loss of savings, damage to their credit history, and repossession of goods and assets.

Fundamental and emerging topics under CEMC are explored in-depth through AFI’s Consumer Empowerment and Market Conduct Working Group (CEMCWG).

CEMC also has relevance for gender policies. Only five 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.

Consumer protection and empowerment are key to financial inclusion efforts and its aim of ensuring that everyone is included in their country’s financial sector. This is clearly demonstrated in the number of Maya Declaration targets that are categorized under CEMC – including targets on consumer protection, financial literacy and financial education.

PRIMARY THEMATIC AREA 2012 2013 2014 2015 2016 2017
2018 2019 2020

Consumer Empowerment
and Market Conduct

  • Consumer Protection
  • Financial Literacy and Financial Education
Maya Declaration Targets 49 72 99 102 122 134 142 192 192
Completed 31 37 50 51 55 58 58 70 84
In Progress 20 17 14 12 16 9 84 122 106
Completion Rate 63% 51% 51% 50% 45% 43% 40.8% 36% 44%

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AFI’s Consumer Empowerment and Market Conduct Working Group (CEMCWG)

A platform to discuss policy and regulatory issues related to consumer empowerment initiatives and market conduct regulations.

Launched in April 2011, CEMCWG aims to support consumer empowerment and protection in order to help secure access to and improve the quality of financial services. Its prime objective is to develop and share a common understanding of lessons learned and cost-effective policy tools, and to promote their adoption at the national level as well as in a broader international context.

51
Member
Institutions
50
Countries
42
Policy
Changes
12
Knowledge
Products

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