A digital world that is all of ours…

On World Consumer Rights Day, Consumers International Director General Amanda Long delivered a speech at the G20 Consumer Summit in Berlin - 'Building a Digital World Consumers Can Trust'.

The prize if we can build a digital world that everyone can trust, and where no one is left behind is clear to see.

In Africa, 1 million hand pumps supply 200 million rural water users.  A third of these hand pumps are estimated to be broken at any one time. In Kyuso, Kenya sensors that could detect and report faults quickly led to a 10 fold reduction in problems. Ninety eight per cent of pumps in the area are fully functioning. But that’s not all, sensors also monitor demand which they can link to fairer payments, and usage data can help plan better services. 

In Europe, it is estimated that 10 million people live with dementia. In the UK, doctors are trialling the use of IoT technology to help them pick up signs of changes in behaviour for patients with dementia. Sensors attached to kettles, fridges and even beds can give vital early clues as to how someone is doing – are they making tea as usual? Are they eating food from the fridge? Picking up and acting on these signs can help people stay well and reduce hospital admissions.

These types of stories are why it is so important to work together so we can make full use of the potential of digital technology and achieve these kind of results for everyone. 

It starts with getting more people online. This will bring many benefits for consumers: more choice, convenience and lower prices; an easier say in how services are run; lower barriers to entry for small businesses thus increasing choice. 

For those with access already, there is still much to gain – such as making the most of the potential of digital to expand opportunities for education, entrepreneurship, creation, healthier environments, healthier lifestyles, smoother transport and more efficient energy distribution. But none of this can happen without trust. 

We need trust for a better digital world 

This is the theme of this year’s World Consumer Rights Day and topic of the G20 Consumer Digital Summit that we are co-hosting with vzbv and BMJV as part of the German presidency of the G20 is ‘building a digital world consumers can trust’

But is this accurate? Do we need to improve confidence and build trust to maintain progress on digital? Doesn’t high uptake and enthusiasm for digital technology suggest that people are largely satisfied? Can’t we just carry on the way we have been, fixing problems as we go along? 

Carrying on as we are is of course an option, we could all convince ourselves that mass uptake and satisfaction with service quality is the same as satisfaction with business models, corporate practice and ethics. But that would be to ignore some clear signals coming from consumers about what the digital world can feel like at the receiving end: 

• 60 per cent of mobile users worry about the privacy and security implications of a world of connected IoT devices. [1]
• 71 per cent of people worldwide believe brands with access to their personal data are using it unethically. [2]   
• And in that same survey, that concerns about privacy are consistent across age, gender, country and personality. 

Not properly understanding and addressing these signals would be missing a trick, it would miss the point that despite the enthusiasm and appreciation of what digital interconnectivity can do, it brings both positives and negatives; and, most importantly, it would miss an opportunity to make the system more inclusive and comfortable for everyone.

Paradox of connectivity

The beauty of so much that digital has given us is that it is all connected. The downside of so much that digital is that it is all connected. It’s a paradox of connectivity.

So when everyday things like payments or returning goods mess up, or updates slow down a device, or when uncanny decisions are made about us based on our likes, habits or opinions, when promises about privacy policies feel empty, when it feels impossible to keep your children safe from harm online – all of these things erode our faith in the other amazing things that we do with digital. 

Perhaps part of the problem is that we too often describe the digital world only in terms of numbers – how fast it is, how many connections there are or how much it could grow. 
But we need to also start thinking not just about how much we could grow, but how we can grow, and what we want to grow towards. We can remain inspired and impressed by the speed and innovation of digital technology, but also keep focused on what we as a world want to achieve through digital innovation?

What do we want to achieve through digital innovation?

Answering this question requires listening to the voices of people everywhere - people as consumers, citizens and as representatives of future generations.  

And trust needs to be more than what we call ‘transactional trust’, I.e the nuts and bolts of a transaction between a business and consumer (or consumers and consumers). 

If tech is going to go deeper into people’s lives, it’s no longer enough to say it will bring convenience, or save money. It has to offer more than that, more than just a transaction. Instead, it is way beyond time to think more roundly about consumers and their trust in the whole experience and try to understand what the combined effect of this fast, expansive, powerful and all-seeing digital technology is on people and their communities, their lives and their idea of the future. What does ‘whole experience trust’ look like to people? 

This type of reflection might be regarded as ‘stifling innovation’ or progress, but it’s the opposite - it’s the definition of progress. To progress means to bring people along on the journey, to pay attention to the impact on people, so that we do not leave anyone behind.   Otherwise we risk similar problems of that other current example of the boundary breaking, cross border, disruptive force - globalisation.  Where impact on some ordinary citizens has not been as understood or considered as necessary and some people have ended up feeling left behind and have lost faith in institutions and leaders.  

So who do we trust to build a better digital world?  

It’s up to all of us - consumers should trust their instincts and articulate what kind of digital world they want for themselves and their children.  Businesses should trust their relationships with people and make a stand to behave more responsibly and respond to people’s concerns – to stand out from the crowd.  Governments should trust their citizens to be able to recognise what is fair and right online and find ways to help them get it. 

No single entity can reassure trust.  And in any case, trust in business, government, media and NGOs is in decline in part because people feel these institutions can’t protect them from the negative effects of globalization and technological change.  

We need to face up to some of the complex and big issues of access, ownership, tracking, competition and to work with the fact that we are in flux – and that we don’t have all the answers but that but that we have a better chance of finding them if we work together. 

The recommendations presented at the summit on 15th March are the first time that the role of demand side trust in driving growth in digital has been thought about, and acknowledged on such a major stage. However, they are just the starting point of something bigger. We want to achieve these recommendations and much more beyond in partnership with others, in line with Consumers Internationals’ new commitment to ‘come together for change’.

Only then can we build the #BetterDigitalWorld that we all deserve.

References

1. Mobile Ecosystem Forum, 2016. 

2. Edelman Trust Barometer: Global Report, 2016.

World Antibiotics Awareness Week: Global food brands must take Antibiotics off the Menu

Anna Glayzer, Advocacy Manager at Consumers International, outlines the need for an urgent, global response to the world's escalating antibiotic resistance crisis. 

This week is World Antibiotics Awareness Week. Given the seriousness of the public health crisis we are facing, there are few topics more in need of heightened worldwide awareness than antibiotic resistance. Many people do not realise that we are a few decades away from the end of modern medicine as we know it. By 2050 drug resistant infections will cause 10 million deaths- becoming a bigger killer than cancer is today.

Resistance to antibiotics occurs naturally with use, making it essential that we use these drugs sparingly, for the treatment of disease, where prevention and other methods of treatment have failed. Instead, the irresponsible use of antibiotics is a major driver of resistance.  Farm animals consume two thirds of the world’s antibiotics. These vital drugs are often routinely added to feed to make animals grow faster or to counter unsanitary conditions in factory farming facilities.

This week is also the one year anniversary of the publication of research showing that the threat from Colistin resistance was far greater than previously realised. Colistin is one of the antibiotics on the World Health Organization’s critically important list. It is used in human medicine as a drug of last resort- something to be prescribed when other antibiotics have failed. Colistin resistant infections in food animals and humans are spreading around the world.This is being driven by agricultural use of Colistin, which continues to rise year on year.

Our campaign #AntibioticsOffTheMenu is about calling on global food businesses to end the routine use of all antibiotics included on the World Health Organization’s list of critically important antibiotics. This week we have published an open letter to the CEOs of KFC, Subway and McDonald’s calling on them to make global commitments to end the routine use of all antibiotics included on the World Health Organization’s list of medically important antimicrobials, in all of their livestock supply chains. This means prohibiting suppliers from using these antibiotics for growth promotion or disease prevention and only using these antibiotics when there has been a diagnosis of illness.

Global food brands like KFC, Subway and McDonald’s are in a position to make an impact on the antibiotic resistance crisis, faster than legislation alone. Subway and McDonald’s have already made commitments in North America. In the USA Subway has committed to only source meat and poultry raised on no antibiotics. McDonald’s USA already serves chicken in the raised without the routine use of any of the antibiotics from the WHO list, with McDonald’s Canada soon to follow.

We welcome the progress by Subway and McDonald’s in North America but action in one country or one region is simply not enough. Antibiotic resistance does not respect national boundaries.  Our food and farming systems are more globalised now than ever. Resistant bacteria spread from the guts of farm animals via faeces, air, soil, water, contact with farm workers, contaminated meat.

The response to the antibiotic resistance crisis the world is now facing will need to be multifaceted. Prudent use in human medicine, better hygiene in health care and the development of new drugs will be needed.  We cannot escape public health disaster unless we tackle agricultural use of antibiotics.

The World Health Organization, the UN, the G20, governments, scientists, consumer and environmental advocates, academics and medical professionals all over the world are calling for urgent action to stop the threat of antibiotic resistance.  Global, consumer facing food brands should act now, and act globally.

Amanda Long: how our G20 campaign is improving financial consumer protection

This weekend marks a significant moment in Consumers International’s advocacy and campaigning on financial consumer protection. CI Director General, Amanda Long, explains.

The financial crash in 2008 highlighted the appalling way that consumers of financial services were being treated by the banks, not just in the major economies but around the world. 

Unfair contracts, hidden fees and charges, putting profit before basic consumer protections. For developing countries this was a serious concern as tens of millions of consumers were joining the market for financial services for the first time. CI members had been reporting this for years, but it was the financial crash that made it global headline news. 

However, when the crash came it was the stability of the banks that received the attention of world leaders. It was not until CI and our members launched our campaign in 2010 that consumer issues were addressed.

Jump forward to November 2014, and the report on the latest international developments in financial consumer protection that G20 Finance Ministers and leaders will receive this weekend. It marks a major change in international efforts to support a better deal for consumers. 

There are now a set of High Level Principles on Financial Consumer protection and a full set of ‘effective approaches’ to support their implementation. A first peer review of implementation is also in progress. FinCoNet (the international network for financial supervisors) is now a formal organization with staff, members and a work plan, and the Financial Stability Board has acknowledged the link between consumer protection and stability of the sector. 

We have travelled a long road to get here.

When CI launched our campaign in 2010 we made a global call for G20 leaders to take action  to strengthen financial consumer protection. Specifically we called for minimum standards relating to:

• Fair contract terms and charges for financial products and services.
• Information design and disclosure on financial products.
• The governance and functions of national financial consumer protection bodies.

In addition we called on the G20 to make recommendations for:

• The promotion of effective competition in markets for financial consumer services.
• The development of a permanent organisation for international standard-setting and coordination with regard to financial consumer protection. 

Four years later significant progress has been made, quite an achievement at the international level. 

The G20 and OECD have agreed the ten High Level Principles and a set of effective approaches to support their implementation. And we will shortly see how that work translates into action for consumers as the first voluntary peer review is underway, with the Central Bank of Ireland becoming the first financial conduct authority to be reviewed. The Netherlands Authority for the Financial Markets (AFM) is undertaking that assessment.

And in relation to another of CI’s demands, FinCoNet, the international network for financial consumer protection, is now a formal organisation with a strong membership and a good work plan including areas that CI has championed, including responsible lending and mobile payments. 

Inclusive engagement by FinCoNet means that CI is an official observer to the network we are have been able to push for greater consumer protections by demonstrating consumer detriment in irresponsible lending and sales incentives.

Of course CI still wants to see much more effective consumer protection nationally and providers changing their policies and practices so the market offers products and services that are safe, fair and appropriate for consumers needs. This is a big challenge but one that consumer organizations are committed to delivering.

Whilst there is still much more to be done (and we may never be able to say that this work is complete) it is important to recognise that none of the international architecture was in place when CI launched its campaign in 2010.

What should the G20’s priorities be on financial services in 2013?

CI’s Justin Macmullan sets out three challenges for the G20 finance ministers ahead of their meeting on 14 February.

Five years ago, at the 2008 G20 meeting in Washington, the assembled leaders announced that, from then on, they would ensure that “all financial markets, products and participants would be regulated or subject to oversight, as appropriate to their circumstances.”

In the immediate aftermath of the financial crisis, it was a dramatic admission that financial markets are too important and too volatile to be left to their own devices.

However it was not until 2010 (and after a widely supported campaign by CI and our members) that the G20 turned their attention to the regulation and supervision of consumer financial services. In no small part this was due to recognition that these services also have an impact on financial stability.

Click here to see a bigger version of the graphic on the right. 

That recognition set in train two important pieces of work.

Firstly, a report from the Financial Stability Board (FSB) underlined the link between financial consumer protection and financial stability and made three proposals – the establishment of a new international body for financial supervisors, work on institutional arrangements for national supervisors and regulators, and strengthening of the tools available to supervisors.

Secondly, the development by a G20/OECD taskforce of a set of high level principles for financial consumer protection which are now being further developed through ‘effective approaches’ for their implementation.

Consumers International played an important part in these developments, campaigning for the work to begin and contributing to the work of the FSB and G20 / OECD taskforce through the development of our own CI recommendations to the G20, detailed responses to written drafts and consultations with members.

So, five years on from the G20’s commitment that “all financial markets, products and participants would be regulated or subject to oversight, as appropriate to their circumstances”, what remains to be done at the international level to ensure consumers of financial services are properly protected?

CI would suggest three broad priorities for this year.

Firstly, the G20 must ensure that the work they have started is completed with haste. Banking scandals continue to undermine consumers trust in financial service providers and in the midst of reforms in several countries it is important that governments and regulators have clear guidance from internationally agreed standards.

However there has been a worrying loss of momentum over the last few months, particularly in comparison to the progress made during 2011.

Therefore it’s important that all G20 countries now contribute the necessary time and resources to ensure that the international commitments they have made are met quickly and according to a clear timetable.

Secondly, alongside accountability for the commitments the G20 have made, there should also be transparency.

An open and modern process should be a given, but if you look for information about the work that is being done by the G20 on financial consumer protection - it is hard, if not impossible, to find.

Greater transparency will not only lead to better results but will also help to push the process forward as more national agencies and organisations are aware of what is being done.

Finally, this is important work and should not end when the papers are written and the reports sent out to national capitals.

The G20 have committed to implement the financial consumer protection principles in their jurisdictions and this should be monitored through a peer review process that will demonstrate impact and enable all countries to continue to learn lessons from what has been done.

Of course this is by no means all that needs to be done. Real challenges remain in the design and implementation of policies at the national level, but if these international processes move along at pace and deliver strong results, they can provide the support that is needed for this urgent national work.

We need effective consumer representation in financial services

CI’s Justin Macmullan comments on the noticeable absence of civil society organisations in the recent deluge of activity regarding financial consumer protection.

It’s a risky business balancing on a two-legged stool, but that is what a lot of international initiatives on financial consumer protection are proposing by relying too much on governments and the industry and not paying enough attention to the role of civil society.

There has been a rush of international activity in relation to financial consumer protection in recent years.

To name a few of the initiatives (with apologies to those I miss) we now have: the World Bank’s best practices on financial consumer protection; the G20 endorsed OECD high level principles and the development of ‘effective approaches’ for their implementation; a new sub group at the Global Partnership for Financial Inclusion; the formalisation of FinCoNet, the network of financial supervisors; and the industry-led SMART campaign that is seeking to improve client protection in the microfinance sector.

This is all very welcome, but look closely and there is something missing.

Most of these initiatives are discussions between governments with the aim of developing guidelines to support governments (the exception, of course, is the SMART campaign that is an industry initiative).

Of course, within the constraints created by a lack of resources and the limited scope of consultations, CI has submitted position papers, responded to draft texts and organised consultations with our members to feed into the international processes.

However, in most cases civil society barely features in the ultimate aim of these initiatives and, where it does, there is little practical assistance to strengthen its hand.

This is a serious omission that ultimately threatens the ability of these initiatives to deliver good outcomes.

Civil society and consumer organisations need to be more involved in the development of international initiatives and – crucially – in their implementation at the national level. Most people now accept that an open and participative debate produces better results – the challenge is how to ensure this happens.

Initiatives to achieve this should set aside time and resources to support civil society’s engagement with their processes and put serious thought into how to support civil society’s role in the future.

Alongside this there needs to be a parallel process that systematically seeks to support and develop consumer organisation’s voices on financial services at the international and national level.

The following issues need to be addressed:

• Resources to support consumer representation at the international and national level. Consumer organisations struggle to have the same influence as other groups such as the financial services industry. Some bodies, such as the European Commission and some governments, have responded with an enlightened policy of supporting consumer representation in financial users groups, but this is still rare.
•  Open processes that allow consumer organisations to participate in the development of international and national policy making on financial consumer protection. Internationally and nationally civil society still struggles to be heard in many processes. Ensuring consumer organisations are represented and have access to documents should be a prerequisite.
• Where necessary, support should also be given to ensure consumer organisations have the resources and skills to deliver services for consumers of financial services. This will not only ensure consumers have access to advice and representation, it will also play an important role in developing consumer group own expertise and insight.

Improved consumer input is absolutely necessary to the delivery of more appropriate and relevant policies that respond to the real challenges facing consumers of financial services. It will also help governments and providers to be better informed about the implementation of policies and new challenges facing consumers.

And last but not least, consumers will have access to the advice and services they need from organisations they trust and that exist to represent them alone.

Mexico and the G20 leadership: So far so good

CI Head of Campaigns Justin Macmullan looks at two things the new leadership of the G20 is getting right in financial consumer protection

It was 18 months ago that G20 leaders meeting in Seoul, South Korea, respondedto CI’s call for international action to support financial consumer protection.

For much of 2011, whilst the French government held the G20 presidency, this new area of work received enthusiastic support from Christine Lagarde, the former French finance minister.

Now that the G20 presidency has moved to the Mexican government, what can financial consumers and their representatives expect?

Initial impressions are certainly good. On two of the key issues identified by CI, the Mexican government is saying the right things.

First, in line with the G20 declaration from Cannes last year, the Mexican government has called for the development of a set of guidelines for the implementation of the OECD high level principles on financial consumer protection.

When these principles were adopted by the G20 last November, CI was critical of the weak language that was used – though many of the issues covered were the right ones. These guidelines offer an opportunity to add some of the detail and clarity that was missing in the principles themselves.

The Mexican government has also given strong support to the development of an international organisation for national financial consumer protection agencies (FinCoNet). This was another key CI demand and one that was taken up by the Financial Stability Board (FSB) in their report on consumer finance protection.

Given the impact that failures in consumer banking and credit had on economies around the world, many would say it is remarkable that such an organisation doesn’t already exist.

So overall, the Mexican agenda looks about right. The concern of course is what the final content of the guidelines will be, how effective FinCoNet will be in delivering its mandate and the speed with which this work will be delivered.

On the content of the guidelines and FinCoNet’s effectiveness we will have to see, but CI will certainly continue to lobby for the strongest possible guidelines and support FinCoNet’s development into an effective international agency.

However, the wheels of international negotiation certainly turn slowly. The Mexican government has suggested a two-year timetable for the development of the guidelines.

In their Cannes declaration, the G20 committed to “pursue the full application of these principles in our jurisdictions and ask[ed] the FSB and OECD along with other relevant bodies, to report on progress on their implementation to the upcoming Summits.”

With this timetable, it is unlikely that any country will have their financial consumer protection reviewed before 2014 – a full four years after the G20 first agreed to address this issue. Is this just the price that has to be paid for international consensus?

In 2008, when the world was rocked by the biggest financial crisis in a generation, there was a real sense of urgency and determination that this sector should be reformed. Four years on, it is still a work in progress. 

Put your question to the CI President

On 19 April, 17.30 GMT: CI President Jim Guest will be online with World Bank Live to take questions on financial consumer protection