Regulatory Framework Governing Digital Financial Services (DFS) Awareness in Nigeria

Regulatory Framework Governing Digital Financial Services (DFS) Awareness in Nigeria

The Central Bank of Nigeria (CBN) has in recent times been more deliberate in seeing to fruition the National Financial Inclusion Strategy, in this case through the promotion of Digital Financial Services or DFS as a priority.

To this end, the CBN passed the Guidelines on Digital Financial Services (DFS) Awareness on the 5th of July,2022. 

These guidelines were developed to address gaps in consumer knowledge and practices through DFS which is seen as a potential means of expanding access to financial services for the Nigerian population and boosting innovation in the financial services industry.

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This article will thus be looking at the DFS awareness principle provisions of these guidelines, their applicability scope and their objectives. 

What is the applicability scope of the DFS Guidelines?

The DFS Guidelines apply to all institutions providing DFS including :- 

  1. Deposit money banks.
  1. Merchant banks.
  1. Other Financial Institutions (OFIs).
  1. Payment Service Banks (PSBs).
  1. Other payment service institutions licensed by the CBN.

What are the objectives of the DFS Guidelines?

The objectives of the DFS Guidelines are :-

  1. To set Digital Financial literacy standards for Digital Financial Service Providers (DFSPs).
  1. To align product development, promotion and Consumer awareness to DFS providers.
  1. To enhance transparency and proper disclosures in the rendering of Digital Financial Services.
  1. To ensure evidence-driven approaches to DFS.
  1. To drive a targeted DFS approach to the financial service-underserved segments of the population.

What are the notable DFS awareness principles espoused in the DFS Guidelines?

The most notable DFS awareness principles espoused under the CBN DFS Guidelines are :-

DFS Awareness & Education Promotion

DFSPs are to :-

– Conduct outreach initiatives to underserved populations regarding DFS options available to them.

– Provide information on products in simple English and local languages.

Disclosure, Transparency & User Privacy upon Service Adoption

DFSPs shall :-

– Disclose all items, conditions, fees & other associated charges on product offerings prior to enrolment.

– Ensure data privacy and protection into internal policies.

Product Visibility & Market Testing

DFSPs shall :-

– Ensure that products deployed are suitable for the target customers.

– Test product usability with end-users and modify as is necessary to reduce transaction errors.

Fraud Prevention

DFSPs shall :-

– Provide fraud prevention messages for consumer awareness and product usage.

Awareness & Access To Redress & Complaints Handling

DFSPs shall :-

– Disclose information on consumer complaints channels, resolutions and Service Level Agreements (SLAs) in product enrolment materials.

Monitoring & Evaluation

DFSPs shall :-

– Put in place strategies to assess their policies on raising consumer awareness and product use.

– Develop indicators and performance measuring to assess changes in awareness and usage.

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