Key Evidence

Limited transparency and complexity in digital financial services undermine users’ understanding and confidence, reinforcing exclusion.

Evidence shows that many clients struggle to interpret loan terms, fees, and pricing structures and often face unclear or unexpected charges and limited access to readily available, comprehensive information. This heightens confusion and mistrust and discourages active use and learning, perpetuating a cycle in which low understanding limits engagement, and limited engagement prevents users from building the knowledge needed to navigate services effectively.

• A survey in DRC finds that women are less likely than men to have information about financial products. 22% of women are unable to name more than two products from each category (loans, savings, mobile banking and insurance), compared to 14% of men. (FINCA Canada 2020)
• According to Innovations for Poverty Action’s (IPA) 2021 Nigeria Consumer Protection in Digital Finance Survey, the leading concern among digital financial services (DFS) users is “unclear or unexpected fees,” cited by 25% of respondents. IPA suggests that improving the design and clarity of digital interfaces could help reduce the prevalence of hidden fees, emphasizing that enhancing digital literacy is key to overcoming this challenge. (Innovations for Poverty Action, 2021)

Clear, transparent, and accessible communication is critical to building user understanding and confidence in digital financial services.

Efforts have been made to encourage clear pricing strategies and improve understanding, including developing good practice standards, and advocating for improved digital literacy. When providers use simple language, disclose pricing openly, ensure clients understand terms and conditions, and develop digital interfaces that facilitate understanding, users are better equipped to make informed decisions and manage financial risks. Without these practices, gaps in comprehension and digital literacy persist, increasing the likelihood of confusion, hidden fees, and disengagement from formal financial services.

• Cerise + SPTF’s responsible DFS standards for consumer protection include communicating in simple, local languages, offering a free channel for customers to speak with a live representative, ensuring customers understand the terms and conditions before signing a contract, and publicly sharing clear product information, including pricing, both digitally and at physical locations. (Cerise+SPTF, 2024)

Building trust with customers requires providers to prioritize transparency, clarity, and consistent communication.

Evidence suggests that institutions must standardize and simplify product disclosures, embed fair practice codes that ensure transparent pricing and marketing, and communicate fees and terms clearly across multiple channels. These efforts should be reinforced by customer-centered approaches and monitoring systems that identify misinformation and ensure accountability.