06:17 (GMT +7) - Friday 20/07/2018

Banking & Finance

IFC promotes financial consumer protection

Released at: 10:30, 02/05/2018

IFC promotes financial consumer protection

Photo: Khanh Chi (VET)

Seminar aims to improve financial inclusion in Vietnam.

by Hong Nhung

IFC, a member of the World Bank Group, in collaboration with the Vietnam Banks Association (VNBA), is promoting financial consumer protection practices to ensure that customers have more confidence and trust in the country’s financial system. 

The aim is to make the nation’s banking sector more resilient and to promote the responsible delivery of financial products and services. This will give individuals and businesses more access to finance and contribute to Vietnam’s overall economic development.

A workshop was held on April 26 in Ho Chi Minh City to offer best practice knowledge in financial consumer protection, the experiences of several economies in strengthening their legal and regulatory frameworks, and the main elements of good financial consumer protection practice in credit reporting. A good credit reporting system should be safe and efficient, and fully supportive of consumer rights while collecting and sharing information among creditors.

Financial consumer protection —a group of laws, regulations, and institutional arrangements that safeguards consumers in the financial marketplace—has become a significant priority for policymakers over the last decade. 

This can be attributed to the considerable financial losses of consumers and investors, the economy caused by poor market conduct over the past few years and the increased vulnerability of customers due to emerging technology-based financial services. To address these issues, efforts have been made to enhance disclosure and transparency, fair treatment, and internal and external dispute resolution. 

More than 100 representatives from commercial banks, industrial associations and government agencies discussed the importance of customer protection, the financial sector’s stability and how to access more customers. Participants were updated on how policymakers and banks are addressing new consumer risks such as the challenges of delivering financial products and services through digital channels. 

The workshop also featured talks about how credit reporting service providers should take on consumer protection as a core part of their operations in order to maintain the quality and reliability of credit data, thus enhancing creditors’ and consumers’ confidence in the credit reporting system.

The workshop was organized in partnership with the Swiss Secretariat for Economic Affairs (SECO) as part of IFC’s efforts to facilitate the uptake and usage of a range of financial products that can be easily accessed by consumers, including the previously unserved or underserved segments, and to deliver products and services in a responsible and sustainable manner in Vietnam.

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