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Determinants affecting digital financial consumer protection: Evidence from 135 countries

Author

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  • Dinh, Van
  • Le, Dao-Van
  • Duong, Duy
  • Pham, Dung

Abstract

Asymmetric information in digital financial markets is increasingly becoming a severe problem in the digital era. Consumers of digital finance suffer from asymmetric information compared to financial agents due to the complexity of services and their passive position in collecting, analyzing, and processing information. This study offers measures to improve the practice of digital financial consumer protection (DFCP) through quantitative analysis, using a sample of 135 countries from 2014 to 2018. This manuscript indicates that two groups of factors positively affect financial consumer protection: market size (openness) and technological readiness. The results show that technological improvement and economic openness factors worldwide are seen as tremendous opportunities in the digital age, rather than challenges, for strengthening financial consumer protection. Governments thus need to adopt policies that focus on absorbing new technology, encouraging innovation, and opening the economy instead of controlling actions to protect their citizens.

Suggested Citation

  • Dinh, Van & Le, Dao-Van & Duong, Duy & Pham, Dung, 2023. "Determinants affecting digital financial consumer protection: Evidence from 135 countries," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    • Handle: RePEc:eee:joecas:v:27:y:2023:i:c:s1703494923000130
    DOI: 10.1016/j.jeca.2023.e00301
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    More about this item

    Keywords

    Digital finance; Consumer protection; Technology; Openness; Asymmetric information;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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