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131 Banking L.J. 834 (2014)
The New Regulatory Frontier: Building Consumer Demand for Digital Financial Services - Part I

handle is hein.journals/blj131 and id is 982 raw text is: The New Regulatory Frontier: Building
Consumer Demand for Digital Financial
Services-Part I
Ross P Buckley and Louise Malady*
Digitalfinancial services (DFS') are held out as key financial solutions for
improving financial inclusion. However, targeted end-users often offer little
in the way of obvious profitable opportunities and so market forces alone
are not enough to ensure the supply of services and products which match
end-users' means, needs or wants. As a result DFS in emerging markets may
suffer from limited uptake and usage, with consequently little effect on
financial inclusion. In emerging markets, financial regulators have been
focusing on supporting the success of DFS largely through institutional and
regulatory framework efforts. This two-part article argues that financial
regulators must first work to understand and build consumer demand for
DFS rather than purely focusing on developing enabling regulatory
fameworks. This requires a change in mind-set for financial regulators
who are more familiar with promoting financial stability, safety and
efficiency. The authors explore this changing role for financial regulators
and recommend that regulators particularly focus on building consumer
demand through promoting partnerships in DFS as a means ofpromoting
financial inclusion. In addition, the authors highlight that partnerships
introduce collaboration risks and heighten consumer risks; requiring
regulators to adjust regulatory frameworks to ensure such risks are identified
and mitigated. Part I of this article provides an introduction to the topic,
regulatory background, and a section on understanding consumer demand.
Part II, which will appear in an upcoming issue of The Banking Law
Journal, discusses building consumer demand and the authors' conclusions.
Financial inclusion is considered an important means for alleviating poverty
and promoting a country's broader economic development; it is therefore now
receiving greater attention from international financial regulators. This height-
ened importance of financial inclusion for economic development is seeing a
Ross P. Buckley is Scientia professor of law and CIFR King & Wood Mallesons chair of
International Finance Law at the University of New South Wales, Australia. Louise Malady is a
senior research fellow at the University of New South Wales, Australia. This research is supported
by the Centre for International Finance and Regulation, UNCDF, Standard Chartered Bank,
and the University of New South Wales. The authors would like to thank Jonathan Greenacre
for his helpful comments and Ross Willing, Nicole Mazurek, and Samuel Gerber for excellent
research assistance. All responsibility lies with the authors.


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