Consumer Finance Research Articles

Factors in the Formation of Inflation Expectations as Recorded in the Russian National Survey of Consumer Finance

Factors in the Formation of Inflation Expectations as Recorded in the Russian National Survey of Consumer Finance

Risk Management in Internet Consumer Finance: A Case Study of Douyin Monthly Pay

Abstract: This study aims to explore risk management in internet consumer finance, taking Douyin Monthly Pay as a case study for in-depth analysis. Risk management is particularly crucial with the rapid development of internet consumer finance. By studying the current situation of risk management in Douyin Monthly Pay, some problems and challenges can be found. This study puts forward some suggestions and conclusions through detailed case analysis. Through this research, the risk management practice in Internet consumer finance can be better understood, providing valuable references and insights for related enterprises. Given the current context of internet consumer finance development, the importance of risk management is self-evident. Through the Douyin Monthly Pay case study, specific operations and risk management challenges can be thoroughly understood, guiding the industry toward future development. The conclusions and recommendations of this study can offer certain references and insights for relevant enterprises in risk management, promoting the healthy development of the industry.

Heterogeneous effects of information and communication technology development on digital financial consumer protection: Evidence from the global sample

ABSTRACT This study primarily examines the influence of Information and Communication Technology (ICT) on Digital Financial Consumer Protection (DFCP), utilizing a dataset spanning 88 countries globally from 2014 to 2018, within the context of consumer welfare under diverse socioeconomic conditions. The research confirms a positive relationship between information and communication technology (ICT) evolution and digital finance consumer protection (DFCP) in OECD countries with inclusive institutions, competitive markets, and solid educational foundations. Conversely, a negative correlation is observed between ICT growth and DFCP in countries with moderate gender inequality. The study further confirms that ICT development positively influences DFCP due to contextual conditions (i.e. cybersecurity index, political stability, higher educational level, and market quality). Policy implications emphasize the need to address information inequality and protect consumer rights in the digital era. Measures to curb market monopolies of major tech companies and combat unauthorized data usage are recommended. Additionally, enhancing digital literacy is crucial for harnessing the benefits of ICT and promoting financial consumer welfare. Establishing a practical code of conduct aligned with market needs is also essential for ensuring consumer protection.

The (in)effectiveness of financial consumer protection: Quasi-experimental evidence from consumer finance in China

The booming consumer finance sector has grappled with internal and external challenges, which call forth strong regulatory responses to financial consumer protection (FCP). Existing studies, however, have explored the economic consequences of FCP from a macro or meso perspective and failed to evaluate the overall effectiveness of the FCP framework. To remedy this, we collected a novel dataset from an online complaint platform in China, which included over 12,000 real-world complaints from March 2019 to September 2022. Built on the dataset, we employ a regression discontinuity in time approach to examine the effect of a representative FCP policy (i.e., Implementation Measures of the People's Bank of China for Protecting Financial Consumers' Rights and Interests) on the average rating of the consumers' perception of dispute resolution. We confirm the effectiveness of the FCP policy in improving dispute resolution, and the results remain robust for a series of tests. Moreover, the effectiveness of the FCP policy varies in different aspects of perceptions and complaint topics. The heterogeneous analysis demonstrates that first-mover and foreign-shareholding consumer finance companies are more responsive to the Measure. Finally, regulatory punishment and media attention are two channels in which FCP policy benefits consumers' perception of dispute resolution. We further discuss some important policy and managerial implications.

A Statutory Analysis of the Role of the Courts in Protecting Financial Consumers' Rights in the Zimbabwean Banking Sector: The Penelope Case in Context

Abstract The Zimbabwean banking sector has experienced several tumultuous challenges since 2000. This is owing chiefly to the political and economic challenges the country has experienced. Poorly conceived and ill-timed policies have also wreaked havoc in the Zimbabwean banking sector. Financial consumers have sometimes lost their savings to hyper-inflation or overnight policy changes in Zimbabwe. The change in currencies is a good example of how financial consumers have seen their deposits and savings at banks and other related financial institutions eroded to nothing. In 2018, the Reserve Bank of Zimbabwe (RBZ) issued a directive for all banks to convert all deposits made prior to October 2018 from the United States (US) dollar denomination to the Zimbabwean dollar (bond notes and coins). This was done on an exchange rate of one US dollar as to one Zimbabwean dollar, yet in reality, the local currency had been devalued. The RBZ directive left individuals and corporates reeling from exchange losses. The directive was akin to a heist and many people lost trust and confidence in the Zimbabwean banking sector. While many financial consumers suffered in silence, some decided to take their banks to court, demanding a reimbursement of their deposits in the currency in which they deposited or alternatively, the equivalent of the original deposit using the correct exchange rate. This article examines the role of the courts in upholding the rights of financial consumers in the Zimbabwean banking sector in the light of the Penelope case. It also discusses how the Zimbabwean courts could assist in preserving the sanctity of the bank-client relationship among banks and financial customers. In addition, the article explores the role of the courts in challenging unjust laws that affect financial consumers' investments in banks. The strengths and weaknesses of the Zimbabwean banking regulatory framework are further discussed to assess if it is robust enough to protect financial consumers. The article recommends that the courts should objectively set aside unjust laws in the interest of justice to enable banks and other financial institutions to honour their contractual obligations. Policymakers should not adopt poor policies that infringe upon financial consumers' rights. Keywords: Banking sector; consumer protection; financial consumer; deposits; exchange rate; courts.

Efficient Use of Financial Technology in Consumer Finance Companies

With the rapid advancement of China's economy, the demand for consumer credit has surged, driven by diversified consumption scenarios and product categories. Consumer finance companies, alongside traditional commercial banks, have become pivotal in meeting this demand. The integration of financial technology (fintech) into the consumer finance sector has revolutionized the entire business process, encompassing pre-lending, lending, and post-lending phases. This study explores the application and impact of fintech on consumer finance companies, focusing on customer acquisition, risk management, and operational efficiency. Additionally, the study addresses the emerging risks associated with fintech, such as technological black boxes and algorithmic biases, which pose new challenges for risk management. By analyzing the fintech-enabled business processes and risk control mechanisms, this paper provides insights into optimizing fintech applications to enhance efficiency and mitigate risks in consumer finance companies.

Evaluating the effects of geographic adjustments on poverty measures using self‐reported financial well‐being

AbstractA central aspect of poverty measurement is identifying the people and places experiencing financial hardships. This paper explores this relationship using the Consumer Financial Protection Bureau's Financial Well‐Being Scale, which reflects individuals’ self‐assessments of financial challenges. Using this measure, for every 1 percentage point increase in a state's official poverty rate for working‐age adults, there is a 0.59 percentage point increase in the share with low financial well‐being. In contrast, the supplemental poverty rate is negatively correlated with the financial hardship using the CFPB measure. This reflects the supplemental poverty measure's geographic adjustment shifting poverty towards areas with lower rates of financial hardship.

Exploring Financial Knowledge and Consumer Confidence in Disability Insurance Decisions

This study examines the factors that affect the uptake of disability income insurance in the United States, specifically focusing on consumer confidence, financial knowledge, and human capital. Background: Disability income insurance is essential for maintaining financial stability as it provides income for individuals who are unable to work due to health issues. Despite its importance, the adoption of disability income insurance remains low, particularly among certain racial and demographic groups. Methods: Logistic regression analysis was conducted using data from the 2022 Survey of Consumer Finance to assess the relationships between consumer confidence, financial knowledge, human capital, and various sociodemographic factors. Controls for age, employment status, marital status, and race were included. Results: The analysis revealed significant racial disparities in insurance uptake. Asian participants exhibited the highest level of reluctance, while financial knowledge was found to positively correlate with insurance acquisition among Black individuals. Generational differences were also observed, with older White and Latino individuals demonstrating a lower inclination towards obtaining insurance. Conclusion: The findings underscore the importance of culturally sensitive financial education and policies tailored to diverse communities. Improving consumer confidence and financial literacy is crucial for increasing the uptake of disability income insurance, which can enhance economic resilience and well-being across various demographic groups in the United States.

Measuring the Level of Financial literacy of the financial consumer

Measuring the Level of Financial literacy of the financial consumer

Changes in work and adequacy of financial resources during COVID-19 among people with systemic sclerosis: A Scleroderma Patient-centered Intervention Network study.

We investigated (1) work status changes during COVID-19, (2) financial resource adequacy, (3) preferences for work requirements (e.g. remote, workplace, mixed) and (4) work requirements versus preferences, among people with systemic sclerosis. This was a cross-sectional study of participants in the Scleroderma Patient-centered Intervention Network COVID-19 Cohort, which enrolled participants from the ongoing Scleroderma Patient-centered Intervention Network Cohort and externally in April 2020. In August 2022, participants completed questions on work status, financial well-being using the Consumer Financial Protection Bureau Financial Well-Being Scale, work requirements and work requirement preferences. A total of 298 participants with systemic sclerosis were included. Mean age was 58.6 years (SD = 11.4). There were 101 (34%) participants working at the start of the pandemic and still working in August 2022, 179 (60%) not working at the start of the pandemic and still not working, 10 (3%) who stopped working after April 2020 and 8 (3%) who started working. Mean financial well-being did not change from April 2020 to August 2022 (difference: 0.2 points; 95% confidence interval: -1.1 to 0.7). Working participants (N = 109) preferred flexible work requirements (N = 34, 31%) or working entirely remotely (N = 32, 29%), but most were required to work entirely at a workplace (N = 35, 32%) or combined workplace and remotely with a fixed schedule (N = 31, 28%). Work status and financial well-being did not change substantively among people with systemic sclerosis during the pandemic. Flexible work policies may support people with systemic sclerosis to work.

The Comparative Legal Development of the Notion of“Consumer”: Including Discussions on the Applicability of the Consumer Protection Act and the Financial Consumer Protection Act to Guarantee Contracts

The Comparative Legal Development of the Notion of“Consumer”: Including Discussions on the Applicability of the Consumer Protection Act and the Financial Consumer Protection Act to Guarantee Contracts

Execution of Fiduciary Guarantee at Consumer Finance Institutions

Motor vehicles are a staple need today, so that the existence of consumer finance companies is very much needed by the community, In addition, the high level of need for consumptive goods and the limited ability or purchasing power of most people to buy in cash make consumer finance institutions so much in demand by the community, so that consumer finance institutions (consumer finance) is quite active in supporting the business world in Indonesia, both for new motorcycles and for used motorcycle units as well as financing furniture and electronic goods. Consumer financing activities are carried out by providing installment payment options in accordance with the consumer's ability and long term. Problems arise when installment payments are delayed or even to the act of deliberately transferring the vehicle to another party without the approval of the financing institution. When this happens, the financing institution will finally look for its vehicle rather than looking for a debtor who will definitely not pay installments anymore, for that a third party called a debt collector appears who is invited to work together. The pros and cons of using third-party services are what make the author analyze in this study, because often the use of third-party services will also cause new problems.

Taking JD Baitiao as an Example for the Securitization of Internet Financial Consumer Loans: Research on the Structure and Potential Risk

Taking JD Baitiao as an Example for the Securitization of Internet Financial Consumer Loans: Research on the Structure and Potential Risk

Machine Learning-Driven Lending Decisions in Bank Consumer Finance

This paper investigates the bank lending decision process for internet consumer finance using machine learning. It focuses on microloans and compares Logistic Regression and GBDT models for credit risk assessment. Variables are filtered and recoded via Information Value and WoE methods to enhance discrimination between defaulting and performing users. Experimental results utilizing these models predict credit risk and optimize using AUC values. Additionally, it develops a fixed-effect regression model to explore how bank-specific factors affect systemic risk, revealing that larger banks reduce risk, while higher returns, non-performing loans, and equity volatility elevate it, with inconclusive effects from leverage ratio.

Digital financial consumers' decision-making: a systematic literature review and integrative framework

Digital financial consumers' decision-making: a systematic literature review and integrative framework

Resisting Financial Consumer Responsibilization Through Community Counter-Conduct

Resisting Financial Consumer Responsibilization Through Community Counter-Conduct

Consumer Financial Protection Versus Catastrophic Healthcare Expenditure in Zambia

ABSTRACTBackgroundOut‐of‐pocket (OOP) expenses for healthcare are regarded as catastrophic, especially if they account for a substantial amount of a poor household's effective income. This study looks at the frequency and severity of catastrophic healthcare expenditures (CHE) to evaluate the level of monetary safeguarding provided by the present healthcare system in Zambia.MethodsThe study relied on the 2014 Zambia Household Health Expenditure and Utilization Survey, which was carried out in 10 different provinces. The investigated population is divided into quintiles, which divide family units into five groups, each of which represents 20% of the population. The data were analyzed using descriptive statistics, analysis of variance, and pairwise comparisons among the quintiles.ResultsAt 5% level of significance, pairwise analyses of the average of OOP healthcare expenditures as a proportion of non‐food spending reveal that the quintiles have statistically different means. If 10% limit is employed, the concentration index was −0.41, whereas was −0.67. At a 10% limit, the adjusted headcount () is 0.37, and the adjusted overshoot () is 0.15%.ConclusionThe frequency and severity of CHE were negligible during the study period. However, the less fortunate are more susceptible compared to the wealthy to be subjected to the occurrence and severity of CHE. Therefore, policy changes ought to emphasize the protection of the poor and vulnerable to accomplish the goal of universal healthcare (UHC). Finally, research is suggested to include equity and quality in the use of healthcare services.

Discussing the Regulations of ETF in Taiwan: A case Study of the Related Regulations of Financial Consumer Protection Act

Discussing the Regulations of ETF in Taiwan: A case Study of the Related Regulations of Financial Consumer Protection Act

보험약관 설명의무 관련 법제 현황 및 개선방안 - 약관규제법상 편입통제를 중심으로

The legislation concerning the duty to explain insurance terms and conditions has undergone significant refinement through various stages: the enactment of the Act on Regulation of Terms and Conditions in 1986, the amendment of the Commercial Act in 1991, the global financial crisis in 2008, the amendment of the Insurance Business Act in 2010, and the enactment of the Financial Consumer Protection Act in 2020. Currently, violations of the duty to explain are subject to multiple regulatory layers, including the control of incorporation under the Act on Regulation of Terms and Conditions, contract termination, indemnification for damages, administrative sanctions under the Financial Consumer Protection Act, and contract cancellation under the Commercial Act. The duty to explain aims to resolve information asymmetry and ensure the substantial autonomy and initiative of consumers in contract formation. However, detailed discussions are required regarding its rationale and requirements. The rationale for the duty to explain has been examined from the perspectives of contract law, tort law, and insurance law. Specific requirements may include information requirements (importance and asymmetry of information), obligor requirements (expertise and bargaining power of the obligor), and relational requirements (conflicts of interest and potential for abuse). These could serve as preliminary standards in legislative policy-making and judicial decisions related to the duty to explain. The control of incorporation under the Act on Regulation of Terms and Conditions is one of the most stringent measures for regulating violations of the duty to explain. However, when applied to statutory obligations, such as the duty of disclosure included in the terms and conditions, it results in issues where the applicability of statutory obligations differs based on whether they were explained. For standard terms in mandatory insurance like auto insurance, it is inequitable for the content to vary among customers based on whether explanations were given. Furthermore, excluding only disadvantageous clauses from the contract by applying incorporation control and thereby providing benefits that customers could not have obtained at the time of contract formation is also unfair. These problems arise from the application of incorporation control to violations of the duty to explain. Therefore, it is necessary to consider excluding or limiting the scope of incorporation control for violations of the duty to explain insurance terms. Discussions on the duty to explain have traditionally focused on consumer protection. Moving forward, there needs to be comprehensive consideration of consumer protection, the rationality of regulation, the principles of insurance, and equity in discussions on policy improvement.

The reform of consumer protection in mobile payment services in China: Legislation, regulation, and dispute resolution

In China, mobile payment services, based on a rapid development of financial technology, have been playing an essential role in Chinese residents’ daily life, creating a cashless society. Unlike many advanced countries having a clear legal definition of financial consumers and incorporating consumers of mobile payment services into financial consumers, China, as one of the largest markets for mobile payment services, has not had a clear legal definition of financial consumers with no clarity regarding whether consumers of mobile payment services belong to financial consumers. This article not only provides a legal analysis of consumers of mobile payment services in China, but also outrightly explores the prospective reform of financial consumer protection with reference to other countries’ successful experience and standards. By the analysis, this article attempts to find out solution for the Chinese financial consumer protection scheme and argues that the Chinese financial consumer protection scheme has to be well designed to maintain a balance between consumers and mobile payment giants.