- Advertisement -spot_img
28.2 C
HomeBusinessCBN directs banks, others to implement transparency measures in digital transactions

CBN directs banks, others to implement transparency measures in digital transactions

- Advertisement -spot_img

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.

To this end, the regulatory bank has also mandated deposit money banks (DMBs), merchant banks, Other Financial Institutions (OFIs), Payment Service Banks (PSB) and other payment service institutions 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 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 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.

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.

READ ALSO: NIMASA seeks removal of Nigeria from War Risk Insurance classification

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.

Join Our Mailing List!

* indicates required
- Advertisement -spot_img
- Advertisement -spot_img
Must Read
Related News
- Advertisement -spot_img