Driving financial inclusion – striking a balance between innovation and consumer protection


In the dynamic landscape of today’s global digital economy characterised by rapid technological advancements and increasing interconnectedness, the need to promote access to financial services for all is emerging as the tool for promoting economic growth and reducing financial inequality.

And across the globe, the need to drive financial access and inclusion – in terms of adoption, use and upgrade of financial solutions – has become regulators’ and policymakers’ main preoccupation; and also influencing the realignment of regulatory frameworks to accommodate and enhance the rollout of new financial tools.

Within this context, policymakers of Ghana in 2018 adopted the National Financial Inclusion Development Strategy (2018-2023) with the primary aim of increasing the availability of a broad range of affordable and quality financial services that meet the needs of all Ghanaians: and the deployment of varied innovative financial tools has increased the need to strike a delicate balance between promoting financial inclusion and safeguarding the end users – consumers.

Therefore, this article seeks to delve into how innovations can be useful in driving greater financial inclusion while also emphasising the need for robust consumer protection mechanisms to ensure equitable access and the forestalling of potential risks to financial consumers.

The concept of financial inclusion

Financial inclusion is a transformative concept aimed at empowering marginalised individuals and communities by granting them access to essential financial services. This is in line with the International Monetary Fund’s acknowledgment of the concept as being part of financial sector goals. This multifaceted concept encompasses specific target groups – unbanked and underserved communities – overarching objectives and critical strategies for achieving broader access, usage, and the continuous upgrade of financial solutions. Its goals encompass universal access, poverty alleviation, economic growth and social empowerment.

Broadly, in many parts of the world, lack of access to formal financial services has perpetuated cycles of poverty and hindered economic advancement – as a result of the lack of a credible buildup of financial history to access sufficient funds or even loans to expand businesses or drive economic activities.

The unbanked and underbanked populations, often residing in rural or marginalised areas, face limited opportunities for savings, investments and secure transactions. Thus, financial inclusion has emerged as a powerful catalyst to break these cycles – enabling individuals to accumulate assets, manage risks and invest in economic activities, education and healthcare.

The goals of financial inclusion are to empower individuals and businesses to improve their lives and livelihoods, enhance economic growth and innovation, and ensure financial stability and integrity. While access ensures the availability of services to marginalised populations, use underscores the active engagement with these tools – promoting financial literacy and informed decision-making. Moreover, the upgrading of services empowers individuals to transition from basic offerings to more advanced products as their financial needs evolve, fostering economic empowerment, resilience and broader societal progress.

In Ghana, according to the Ghana Demand Side Survey 2021 – a survey designed to track implementation of the National Financial Inclusion Development Strategy – the country has surpassed its 85 percent target of formally served individuals by 10 percent; emphasising government’s commitment to promoting financial access and inclusion by all citizens.

Emerging financial innovations

Innovation has become the driving force behind expanding financial services beyond the traditional brick-and-mortar model. Technological advancements, particularly the proliferation of mobile phones and Internet connectivity, have transformed the financial sector. In the quest for global financial inclusion, innovative technologies are transforming the way financial services are accessed, provided and utilised.

Importantly, in Ghana and beyond, these cutting-edge financial solutions are dismantling traditional barriers, reaching underserved populations and fostering economic empowerment. These innovations not only lower costs associated with traditional banking services, but also enable financial institutions and fintech companies to reach previously inaccessible markets.

Discussed below are some of the emerging solutions that are reshaping the financial sector to drive inclusion:

  • Mobile Money: At the heart of innovations churned out by fintech companies and financial institutions are payment services; and at the forefront of financial inclusion in Ghana is the mobile money revolution, which became operational in the country in the last decade and has paved way for other innovative payment solutions. Services like MTN Mobile Money have propelled the nation to the forefront of mobile banking adoption.

These platforms allow users to perform financial transactions using basic mobile phones, transcending geographic barriers and enabling rural populations to access banking services with ease. The economic and financial data report of the Bank of Ghana indicates that there are about 59.7 million registered mobile money accounts as of June 2023, showcasing the significant impact of this innovation.

  • Digital Payment Solutions: Equally, digital payment platforms like ZeePay, Slydepay and ExpressPay have emerged as game-changers in Ghana, providing users with secure and convenient ways to make payments and conduct transactions. These platforms offer flexible payment options for utility bills and online shopping to peer-to-peer transfers. Their user-friendly interfaces have made them essential tools for promoting cashless transactions, not only in Ghana but across the globe.
  • Peer-to-Peer Lending Platforms: peer-to-peer lending platforms are reshaping the lending landscapes, particularly for small businesses and entrepreneurs in Ghana. One of the most compelling outcomes of this innovation is the democratisation of access to credit. Small businesses and entrepreneurs, who often face challenges in obtaining loans from traditional banks due to stringent eligibility criteria and other mandatory processes, can now benefit from a more inclusive lending environment. By connecting borrowers directly with investors, these platforms streamline lending processes and bridge the gap between borrowers and lenders.
  • Biometric Identification Systems: Innovations in biometric identification are revolutionising access to financial services. In Ghana, introduction of the Ghana Card – a biometric identification system – is enabling individuals to verify their identity securely and access financial services more easily. Biometric technology enhances security, reduces fraud and simplifies authentication processes, particularly in regions where traditional identification methods may be lacking.

Balancing innovation with consumer protection – the considerations

Innovation and consumer protection are two key factors that influence the level of financial inclusion in a society, considering that consumers are the end users of financial solutions. While financial innovations accelerate financial inclusion by creating new products, services, channels and platforms that can meet the diverse and evolving needs of different segments of the population, consumer protection ensures that financial inclusion is achieved in a responsible and sustainable manner – through safeguarding the rights and interests of consumers, promoting transparency and accountability while preventing fraud and abuse.

Nonetheless, innovation and consumer protection are not always aligned, and sometimes they may pose trade-offs or challenges for each other. For instance, innovation may introduce new risks or complexities that consumers may not fully understand, such as data privacy or cybersecurity.

Similarly, consumer protection demands may impose regulatory or compliance requirements that may stifle innovation or create barriers to entry for new players or solutions. Therefore, finding a balance between innovation and consumer protection is crucial for driving financial inclusion in a way that maximises the benefits and minimises the harm for both providers and consumers.

Some approaches to achieving a balance between driving financial inclusion and consumer protection are considered below:

  • Robust Regulatory Framework: One important approach to achieving this balance is for the regulators and policymakers to adopt a risk-based and proportionate regulatory framework that can accommodate different types of innovations and consumer protection measures, depending on the level of risk and impact they entail. Thus, regulations need to be forward-thinking, adaptable and supportive of innovation while simultaneously safeguarding consumers.

For example, low-risk or low-impact innovations may be subject to lighter or no regulation, while high-risk or high-impact innovations may be subject to stricter or more comprehensive regulation. Regulators should therefore collaborate closely with industry stakeholders to understand the nuances of emerging technologies and tailor regulations accordingly. These frameworks should encourage experimentation within defined boundaries, ensuring that innovation thrives without compromising consumer rights. This can allow for more experimentation and innovation, while also ensuring adequate consumer protection and oversight.

  • Data Privacy and Security: Given the data-intensive nature of innovation, the establishment of robust data privacy regulations emerges as a necessity to safeguard consumer information against potential misuse. It therefore becomes imperative to adopt and deploy stringent measures which ensure the responsible collection, storage and sharing of personal and financial data. This mostly entails defining precise protocols for data-handling, encryption and access controls, thereby mitigating the risks associated with unauthorised data breaches or unauthorised access.

Regulations should also provide consumers with control over their data, enabling them to make informed choices about its use. This involves creating mechanisms that allow individuals to provide explicit consent for data-usage, and enable them to access, modify or delete their data as needed. Such user-centric control not only reinforces data privacy but also fosters a sense of trust in the financial sector.

  • Inclusive Financial Solutions: Innovations must be intentionally designed to embrace inclusivity, ensuring that they cater to the requirements of diverse user demographics – and this encompasses individuals spanning various levels of digital literacy. User interfaces should be user-friendly and capable of accommodating a wide range of users, making financial services accessible to everyone.

For instance, a collaborative effort among regulators, financial service providers, financial consumers and industry experts can be initiated to recognise the potential and obstacles associated with innovations. By co-creating solutions that directly address consumer needs and preferences, as well as by actively overseeing and evaluating the outcomes and impacts of these innovations, a foundation of trust and confidence can be fostered among stakeholders. This will help make innovations better and more effective, while also making sure that consumers are well-protected.

  • Financial Literacy: Educating consumers about the benefits, risks and responsibilities associated with innovative financial products is paramount. Financial literacy initiatives should be widespread and accessible, offering information on how to use innovative technologies effectively and securely. These educational initiatives should encompass a range of topics from basic financial concepts to more specialised information about specific innovative products.

Consumers should gain insights into how to use digital platforms securely, manage their personal data, and recognise signs of fraudulent activities. Empowered consumers are more likely to make informed decisions, identify potential pitfalls and navigate complex financial landscapes with confidence.

  • Digital Identity Verification: Secure and reliable digital identity verification is fundamental to preventing fraud, identity theft and unauthorised access. Robust authentication processes ensure that only authorised individuals can access financial services and sensitive information. Collaborative efforts will therefore be essential to establish harmonised standards for digital identity verification that prioritises the triad of security, privacy and usability.

Regulators and policymakers should continuously work at updating regulations and directives which mandate robust identity verification practices while safeguarding financial consumers’ privacy rights. Simultaneously, financial service providers – including financial institutions and fintech companies – need to embrace these standards and invest in advanced identity verification technologies.


The pursuit of financial inclusion has the potential to bring about significant economic transformation and empowerment for unbanked and underserved populations. There is therefore a need to leverage technological innovation in continuously paving the way for inclusive growth and reduced financial inequality. To this end, implementing regulatory frameworks that promote responsible innovation, prioritise consumer education and uphold ethical standards will collectively drive a seamless transformation of the financial landscape, ensuring a balanced and effective approach to advancing financial inclusion.

>>>the writer is an Associate at Sustineri Attorneys PRUC (www.sustineriattorneys.com). Cecilia specialises in Technology, Startups/SMEs, Corporate and Commercial Transactions, Intellectual Property as well as Dispute Resolution. She welcomes views on this article via [email protected].

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