Data protection is gaining salience in digital financial services. Consent is an essential, necessary (even when not sufficient) element of any data protection toolkit. The Reserve Bank of India through its guidelines for digital lenders and the Digital Personal Data Protection Bill 2022, both emphasise the need for effective consent artefacts.
Yet, there is much left to be desired in the design of consent artefacts. Several studies show consent artefacts are crafted as dense, lengthy legal notices in English—dissuading customers from reading it. Even when customers overcome their mental biases to consume them, they do not comprehend them given their form. They are unable to recall what they consent to or imagine its implications. This is in stark contrast with the regulatory vision of making customers aware about the use of their data and giving them the information and agency needed to effectively consider their consenting decision.
Dvara Research and Final Mile are collaborating on a behavioural science informed primary study to unpack the barriers that customers currently face in engaging with and understanding consent artefacts. This understanding is used to inform the design of consent artefacts provided in digital financial services. As the first case-study in this series, we apply these findings to tweak the consent artefacts provided by account aggregators in the case of digital lending. This blogpost introduces the study.
The newly released Findex Data indicates that a large gap still exists in how different customers use formal financial services.[i] Only about 19% of adults in India lean on formal loans while informal lending from social network remains quite high.[ii] Estimates suggest that there exists a credit gap of about 330 bn USD in India.[iii] Looking under the hood, the common suspects—regional and gender gaps further skew the access to financial services, including but not limited to credit. Per private estimates, northern and eastern parts of India lag in digital transactions.[iv] Similarly, Findex Data suggests that women lag men in mobile ownership by 20%, impeding their access to digital financial services.
To further inclusion, providers need to reimagine product offerings and interfaces. They would have to recast the delivery chains and reinvent their vocabulary, customer experience and safeguards. New-to-finance customers are at a greater risk of financial frauds due to their reliance on agents and other go-betweens for assistance. Customer journeys of products must account for their unique needs and vulnerabilities.
In this context, the Account Aggregators (AAs) who were created to bridge the gap between customers and financial services by facilitating information flow across the financial ecosystem, assume an important role. AAs could help customers – especially those with little to no formal financial history – access a better quality of financial services by helping financial service providers better understand a customer’s financial profile.[v]
But the design of the AA consent artefacts could make their use challenging for customers.
B. Challenges with consent artefacts in the AA framework
Explicit, informed, and revocable consent is the backbone of the AA framework. There is sufficient literature to establish that most customers do not read or comprehend consent artefacts before consenting. Effectively, the information asymmetries that define the relation between the provider and the customer, remain intact, despite the consent artefact.[vi] Even when customers comprehend the consent artefact, they may suffer from bounded rationality and may not be able to completely appreciate the terms and conditions of data sharing that may influence them to take a sub-optimal decision. These concerns apply to both savvy and non-savvy customers but may be particularly accentuated for the latter.[vii]
Our primary research indicates that unsavvy customers often find digital ecosystems overwhelming, find themselves ill-equipped to comprehend and reflect on terms and conditions to make informed decisions.[viii] This can often breed mistrust and fear of formal finance.
Given AA’s objective of financial inclusion, their interface and design would have to be reimagined for new-to-finance, less literate, digital immigrant, low-income customers. There is a need to make consent artefacts more inclusive, to better serve new-to-finance, less literate, digital immigrant, low-income customer.
C. The study: Designing inclusive consent artefacts
- Objective: The objective of the study is to design inclusive consent artefacts for the AA framework. This would enable AAs to better serve all customers including those who are new to technology and DFS, and who have limited general, digital, and financial literacy. These artefacts would be designed for both smartphone and feature phone users.
Characterising inclusive consent artefacts: Building on the legal and regulatory requirements placed on consent, by the RBI and the proposed DPDP as well the barriers that users face in engaging with consent artefacts, the study proposes an inclusive consent artefact would satisfy six elements:
- Accessible,i.e., conspicuously available and designed for both feature and smart phones.
- Comprehensible, i.e., easy to understand.
- Free, i.e., consent should not be coercive.
- Informed, i.e., it should set out all necessary information and require an affirmative action.
- Specific, i.e., it should indicate the granular purposes of processing for which consent is being taken.
- Revocable, i.e., capable of being withdrawn.
Features (iii) through (vi) build on the RBI Master Directions for Account Aggregators and the RBI Guidelines on Digital Lending. Features (i) and (ii) are preconditions needed for the consent artefact to effectively satisfy the other features.
Study Design:The study builds on a primary study designed to draw out the challenges that users face in engaging with consent artefacts. This is done through a behavioural game which simulates several real-life contexts in which users might interact with AA-based consent artefacts and the friction and barriers they experience in meaningfully engage with it.
These findings are synthesised to extract design levers that could help people overcome these barriers. These design levers further inform the creation of a toolkit of specific design features, whose presence would enhance users’ engagement with and comprehension of the consent artefact.
[i] Demirguc-Kunt, A., Klapper, L, Singer, D., and Ansar, S., The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19,WORLD BANK, July 2022, retrieved from https://www.worldbank.org/en/publication/globalfindex/Report.
[ii] Demirguc-Kunt, A., Klapper, L, Singer, D., and Ansar, S., The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19,WORLD BANK, July 2022, retrieved from https://www.worldbank.org/en/publication/globalfindex/Report.
[iii] OCEN & Account Aggregators will change digital lending in India, Sahamati,04 August 2020, https://sahamati.org.in/blog/ocen-account-aggregators-will-change-digital-lending-in-india/.
[iv] Boston Consulting Group, PhonePe, Digital Payments in India: A US$10 Trillion Opportunity, PHONEPE,2022, https://www.phonepe.com/pulse-static-api/v1/static/docs/PhonePe_Pulse_BCG_report.pdf
[v] Kemp, K., Dvara Research, Big Data, Financial Inclusion and Privacy for the Poor, 22 August 2017, https://dvararesearch.com/2017/08/22/big-data-financial-inclusion-and-privacy-for-the-poor/; Le Hourou, P. & Schulman, D., World Economic Forum, Technology is delivering better access to financial services. Here’s how, 20 April 2018, https://www.weforum.org/agenda/2018/04/digital-finance-can-fight-poverty-heres-how/.
[vi] Aiyer, M. & Chugh, B., Dvara Research, Designing a consent artefact for digital financial services to cater to constrained users, November 2021, https://dvararesearch.com/wp-content/uploads/2021/11/Designing-a-consent-artefact-for-digital-financial-services-to-cater-to-constrained-users.pdf
[vii] Aiyer, M. & Chugh, B., Dvara Research, Designing a consent artefact for digital financial services to cater to constrained users, November 2021, https://dvararesearch.com/wp-content/uploads/2021/11/Designing-a-consent-artefact-for-digital-financial-services-to-cater-to-constrained-users.pdf.
[viii] Dvara Research, CGAP, and Dalberg, Privacy on the Line: What do Indians think about privacy & data protection?, DVARA RESEARCH, 16 November 2017, https://dvararesearch.com/2017/11/16/privacy-on-the-line-what-do-indians-think-about-privacy-data-protection/.
Cite this blog:
Beni Chugh, S. P. (2022). Designing effective consent artefacts under the Account Aggregator framework. Retrieved from Dvara Research.
Beni Chugh, Srikara Prasad. “Designing effective consent artefacts under the Account Aggregator framework.” 2022. Dvara Research.
Beni Chugh, Srikara Prasad. 2022. “Designing effective consent artefacts under the Account Aggregator framework.” Dvara Research.