Consumer protection framework in the Kenyan financial services sector: Current state, deficiencies, lessons from the world and possible solutions

Abstract

This paper discusses the current state of the market conduct regulatory framework in the Kenyan financial services industry. The paper then progresses to carry out a comparative analysis of the Kenyan regulatory framework with the Canadian, UK and US market conduct regulatory frameworks. The comparative analysis will include the gaps in the Kenyan regulatory framework vis-à-vis the Canadian, UK and US markets. The paper also assesses the data protection legal framework in Kenya, its deficiencies and how this affects consumer protection. It then provides recommendations on how the Kenyan government agencies can cure the deficiencies noted. One of the crucially important learning points in this paper is the importance of data protection laws in ensuring consumer protection. A vital conclusion is how absolutely essential proactive regulator action on market conduct is in ensuring a robust market conduct protection framework. Such regulator action would be market conduct themed inspections that would lead to recommended actions to cure deficiencies to enhance the data protection framework. This paper also recommends that regulators in collaboration with government policymakers look at the emerging area of FinTech and examine the market conduct framework that should be put in place.