Consumer privacy risks have proliferated in the last decade in parallel with the increased adoption of digital technologies and the availability of consumer data. The great onboarding onto digital finance necessitated by COVID-19 also opened up vulnerable consumers to data misuse through scams in markets like the Philippines, Kenya, and India, among many others. Privacy violations can also have serious long-term consequences for financial inclusion and, even as access has improved, trust remains a critical ingredient in translating that progress into sustainable gains for consumers.

Evidence shows that when consumers fall prey to privacy-related harms, the loss of trust dissuades them from the opportunities afforded by digital finance. Privacy implications not only affect consumers but also impact businesses. While compliance with new data protection regulations has brought stronger safeguards, the rapid speed at which consumer data is collected, used, and shared in digital finance has far outpaced consumers’ understanding. For low-income digital financial consumers, the limits of informed consent and choice are even starker.

This report is intended to be an introduction to Privacy by Design (PbD) and to review the main PbD approaches in literature and wider market practice for their potential applications in the inclusive finance sector. The analysis is based on a literature review and key informant interviews with privacy and inclusive finance experts conducted by the Center for Financial Inclusion (CFI) between May and August 2022. The paper groups findings into four approaches to PbD, each of which attempts to embed privacy through different means, often by combining various tools, methods, and areas of application. The paper also identifies a series of gaps and barriers that limit the potential of PbD, particularly in emerging markets and developing economies. The report closes with considerations for the adaption of PbD for fintechs working with low-income and vulnerable consumers. CFI aims to build off this initial report to develop practical guidance on PbD for fintech product teams.

Alex Rizzi

Senior Research Director, Consumer Data Opportunities and Risks

Since joining CFI in 2012, Alex has been an advocate for consumer protection and evidence-based inclusive finance practices.

She manages the responsible data practices research portfolio at CFI which focuses on opportunities and risks for low-income consumers from data-driven financial services. Previously, she was a senior director for CFI’s Smart Campaign initiative, where she managed consumer-protection learning agendas and helped launch the Client Protection Certification Program.

Prior to joining CFI, Alex was a project development manager at Innovations for Poverty Action, where she helped create its microsavings and payments innovation initiative (now part of its global financial inclusion initiative), a research fund focused on impact evaluations of savings products and payment systems. She also worked at the Centre for Microfinance at IFMR Research (now Krea University) in Chennai, India, where she was the head of knowledge management and dissemination.

She has participated in multiple industry working groups on responsible finance, including an advisory group to GSMA’s mobile money certification program and the Microfinance Center’s social performance fund steering committee.

Alex is a graduate of Princeton University and holds a master’s degree from Georgetown’s foreign service school, as well as a certificate in digital money from the Digital Frontiers Institute and The Fletcher School at Tufts University. She speaks conversational French and needs to work on her Italian.

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Privacy as Product: Privacy by Design for Inclusive Finance

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