In financial services, consumer data can be a catalyst to unlock a range of personalized, effective products and services to help low-income people achieve their goals. These opportunities also bring new risks, however: amidst the big bang of digitalization, consumers, especially those with low levels of digital and financial sophistication, may not understand the potential harms of sharing their data. Additionally, few low- and middle-income countries have robust data protection regimes in place to monitor and respond to harm.
CFI’s work in this area — part of our four-pronged strategy for advancing inclusive finance — focuses on building incentives for transparency around data and privacy practices of digital financial service providers. For example, we study how financial service providers use algorithms and what must be done to protect already-underserved populations against algorithmic bias in automated decision-making. We speak with consumers directly to gauge their perceptions of privacy and the use of their data in order to inform regulators and providers. We monitor emerging data privacy and protection frameworks around the world to understand what does and does not work to advance financial inclusion while safeguarding data privacy, portability, and other consumer rights.