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100 Certified Seal Final - IBarres 4-24-2018Adapting Smart Certification for Digital Financial Services

>Posted by Alex Taylor, Marketing and Community Outreach Manager, Smart Campaign

This is the fourth in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry.

Since launching Smart Certification in 2013, we’ve witnessed rapid changes in the financial inclusion space driven by digitization of financial services and fragmentation of traditional business models. Nearly $100 billion in investment has flown into the global fintech market since 2010, creating an explosion of digital innovations and provider models. Our analysis of the Global Findex data shows that recent gains in inclusion have been largely driven by the rise of mobile money and digital payments.

Digital financial technology is central to making financial products more accessible to underserved people around the world. This is an exciting moment for digital finance, and an equally important for time for client protection. The industry has the opportunity to marry the client-centric approach embraced by so many fintechs and the industry-accepted consumer protection standards to develop quality products, build trust, and encourage usage. The Smart Campaign will leverage its experience to help lead the charge on this.

As we celebrate 100 Smart Certifications, we look forward to the next 100. Looking to the future requires defining responsible practices and standards given the technological advances that allow nearly instant access to credit, payments, savings, and insurance. The standards and the certification program must become more agile, mirroring the fast pace of change. We envision an adaptable approach that takes into consideration the product and client delivery mechanism, as well as the provider’s function in the value chain. The flexibility of this framework could eventually allow any type of provider to seek certification, but the process will begin with a focus on digital lenders and expand to encompass additional business models on a demand-driven basis.
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> Posted by Sarah Samuels, Global Operations Manager, the Smart Campaign

This is the third in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry

When financial service providers approach Smart Certification, they often have a number of questions. Many want to know if certification is worth the investment in terms of their financial bottom line. The answer we’ve heard from Smart Certified institutions is an unequivocal “yes.” As the Smart Campaign celebrates the recent milestone of 100 Smart Certifications, we’d like to explore the value of certification as Smart Certified financial service providers see it.

In partnership with Deutsche Bank, the Smart Campaign recently conducted a survey of certified institutions to understand how they view their experience with Smart Certification. (You can find the full survey findings in the Consumer Protection Resources Kit.) In an affirmation of Smart Certification’s value, 82 percent of institutions surveyed believe the cost of certification (in terms of both the servicing fee and internal staff time) was compensated by the value the institution received in return. This finding aligns with research from the European Microfinance Platform, which determined that consumer protection practices, such as price transparency, respectful collection practices and effective complaint resolution, are linked to higher financial returns and have a positive impact on the provider’s bottom line.

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> Posted by Robin Brazier, Communications and Operations Associate, the Smart Campaign

This is the second in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry

Smart Certification recently reached the milestone of 100 certified financial institutions, which collectively serve 42 million clients around the world. Among our lessons learned along the way: consumer protection starts with listening.

When the demonetization crisis struck India in 2016, many clients were left with currency that was no longer valid and had no means to repay their loans. They worried that their financial institutions would treat them harshly. Sulthana, who owns a small shop in India, had a different experience with Ujjivan, a Smart-Certified small finance bank: “When demonetization happened…we told Ujjivan that we needed a few more days to repay it. They were very considerate and understanding, spoke politely and gave us a few more days [to repay the loan].”

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> Posted by Isabelle Barrès, Global Director, the Smart Campaign

This is the first in a series of blog posts exploring the impact of Smart Certification on the financial inclusion industry.

The Smart Campaign is thrilled to announce that 100 financial service providers have been Smart Certified, extending fair treatment and respect to more than 42 million low-income financial clients around the world. One hundred Smart Certifications marks a major milestone for the advancement of pro-client practices in the financial inclusion industry. These 100 financial service providers have worked to achieve and demonstrate their commitment to protecting clients from harm and delivering responsible financial services.

The journey to 100 certifications began with the launch of the Smart Campaign in 2008, at a time when microfinance sector leaders recognized the need to ensure that consumers remained front and center to their operations as the sector underwent a period of rapid growth. The Smart Campaign went on to become an umbrella for financial inclusion sector cooperation, through the endorsement of thousands of stakeholders of the Client Protection Principles (CPPs) and accompanying standards. The CPPs offer a common framework for understanding client risks and improving practices, and form the bedrock of the Campaign’s Smart Certification program. The certification program was launched in 2013 as a tool to support and reward financial service providers that offer appropriate products and services and deliver them in a fair and respectful way.

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The views and opinions expressed on this blog, except where otherwise noted, are those of the authors and guest bloggers and do not necessarily reflect the views of the Center for Financial Inclusion or its affiliates.