The Central Bank of Nigeria (CBN) has directed financial institutions and payment service providers to do more to enhance transparency and proper disclosure of Digital Financial Services (DFS) going forward.
The apex bank also mandated deposit money banks (DMBs),
merchant banks, Other Financial Institutions (OFIs), Payment Service Banks
(PSB) and other payment service institutions under its regulation to boost
their fraud prevention and risk management capabilities by providing fraud
prevention messages and tips for consumers using both audio and virtual modes
of communication in local languages.
The central bank further directed the institutions to
monitor fraud reports to identify emerging fraud issues and sensitise their
customers on how they can protect their assets, following the growing threats
to cybersecurity in recent times
The bank disclosed this in its ‘Exposure Draft on Digital
Financial Services Awareness Guidelines,’ which seeks to address gaps in
consumer knowledge and practices with DFS as well as beef up the security of
digital services.
The central bank noted that DFS has the potential to expand
access to financial services for the Nigerian population and spur innovation in
the financial services industry.
The proposed guidelines provide for a set of principles and
expectations for financial service providers to integrate into the provision of
DFS to ensure consumer understanding, good treatment, and positive outcomes.
The framework also seeks to set Digital Financial Literacy
(DFL) standards for Digital Financial Services Providers (DFSP), align product
development, promotion, and consumer awareness to DFS amongst DFSP, enhance
transparency and proper disclosure on DFS as well as provide for the
development of financial literacy and consumer education materials on DFS.
The guidelines further provided for awareness and access to
redress and complaints handling by mandating financial institutions and payment
service providers to disclose information on consumer complaints channels,
resolutions, and Service Level Agreements (SLAs) in product enrollment
materials as well as ensure periodic training of agents and complaints handling
staff
In addition, the framework stated that DFS providers shall
henceforth disclose all terms, conditions, fees, and other associated charges
on product offerings prior to enrollment, ensure integration of data privacy
and protection standards into internal policies and conduct evidence-based
awareness campaigns to sensitise consumers on how to protect their assets and
sensitive details and develop default settings on DFS which are by nature
“opt-out” not “opt-in” of data sharing with third parties, and clear and simple
“opt-in” language for sharing of data, as well as ensure privacy to data
collection and sharing during product enrollment.
The digital service providers were further required to put
in place strategies to assess their policies on raising consumer awareness and
product usage; develop indicators and performance measures to assess changes in
awareness and usage; forward their strategies and performance measures to the
Director of Consumer Protection, CBN bi-annually for review.
Moreover, they were requested to forward monthly returns on
consumer awareness programmes/initiatives conducted to the Director, Consumer
Protection, CBN.
The CBN guidelines came amidst efforts to safeguard
financial services consumers against all forms of abuses and exposure to
security threats amidst the growing influence on digital services and payment
culture.
Last month, the apex bank released the Risk-Based Cybersecurity Framework and Guidelines for OFIs, following the recent increase in the number and sophistication of cybersecurity threats against financial institutions. -THISDAYLIVE