Standard Setting

The Client Protection Standards were created to operationalize where the financial inclusion industry sets the bar in terms of the minimum behaviors clients should expect from financial service providers (FSPs) with which they do business. They build off of the seven Client Protection Principles and specify what ‘doing no harm,’ must entail in practice. They are the cornerstone of the Smart Campaign’s technical work including tools, training, assessments and Certification.

Standards that reflect social norms and expectations of an evolving industry must be dynamic. The revised standards have been designed to keep pace with the industry’s needs as it grows more sophisticated and influential. New products and delivery methods offer tremendous value for clients, but they also inevitably create additional risks. The revised standards provide new guidelines on responsible savings and insurance products, as well as delivery channels using digital services and agent models, all with an eye toward mitigating risk and creating benefits for clients. As before, FSPs that do not offer certain products will not be evaluated on the standards related to those products. The second version of the Smart Campaign Standards went ‘live,’ as part of Certification and assessment missions in July 2016.

In its standard setting work the Campaign aspires to follow the ISEAL Code of Good Practice on Standard Setting. This code encourages a highly consultative process.The current version of the Smart Campaign Standards is the result of a 2-year revision that included the input of leading industry experts and a lengthy open comment period. The Smart Campaign has extensively documented the research, feedback, and public comments and milestones. If you are interested in the first version of the standards (1.0), click here.

In addition, the Smart Campaign Client Protection Certification Standards and the Social Performance Task Force Universal Standards for Social Performance Management (“the Universal Standards”) were developed and updated through a closely coordinated process involving the Smart Campaign, the SPTF, and CERISE. The SPTF fully integrated the updated Client Protection standards into the relevant sections within the updated Universal Standards. In other words, there are no inconsistencies in the tools offered by the Smart Campaign, SPTF and CERISE or any lag time in the roll-outs of the respective tools’ updates—nor will there be in future. All three organizations are committed to revising the standards no more frequently than every three years. The Smart Campaign will complete a revision of its standards every three years. If you have any complaints or questions about the current Smart Campaign standards, please utilize the Appeals and Complaints system.

What’s Next? Responsible Fintech and Beyond

The standards, although developed for FSPs, provide a framework that is relevant to other providers of financial services to the base of the pyramid. They will continue to evolve as new providers, products, and business models change the nature and extent of risks and benefits to clients. The Smart Campaign is already working with some of these new entrants (i.e., FinTech companies) to determine to what extent existing standards need to be expanded to reflect this evolution. This will help define the next generation of guidelines and standards that needs to be developed to ensure that clients remain protected.  The Campaign and its partners have identified several areas for future research, analysis, industry good practices and possibly, even standards. Some examples include:

  1. Digital Credit: Digital credit is growing fast, with Kenya’s M-Shwari perhaps the best known example. The new products are often backed by data analytics rather than traditional repayment capacity analysis. There has been little systematic examination of the client protection issues raised, and the Campaign is well-placed to investigate and work toward clearer guidance.  The Campaign has conducted research projects with two digital lenders and plans to expand this project to additional markets in Africa and beyond.
  2. Agent Banking: The Smart Campaign will work in multiple markets (already underway in India with the Business Correspondent Federation of India), to map the CPP standards against agent models to identify the top client protection risks and mitigating steps.
  3. Client Protection Issues for Serving Refugees: Due to numerous ongoing conflicts, the Middle East and other regions have experienced a substantial influx of refugees. Because they often lack working permits, an address, and fixed assets, refugees make up a uniquely vulnerable population. At the same time, they are often educated and spend an average of seven years in their host country, and therefore able to play a productive role in the host economy. The Campaign is looking for opportunities to research and identify the unique client protection risks for this demographic and share good practices.

Guiding the Smart Campaign through how to best build towards demonstrable improvements in practice among these new players is a group of advisors that make up the Standards Committee.

Felipe Arango, Managing Partner, BSD Consulting Group

Doubell Chamberlain, Founder and Managing Director, CENFRI

Alex Fiorillo, Founder and Principal, Grid Impact

Cara Forster, Consultant, SPTF

Ros Grady, Consultant

Bobbi Gray, Research Director, Grameen Foundation

Mark Hookey, Founder and CEO, DemystData

Saad Farooq, Mobile Money Specialist, GSMA

Elisabeth Rhyne, Managing Director and Founder, Center for Financial Inclusion

Anup Singh, MicroSave

Maria Vidal, Financial Sector Specialist, CGAP