The Central Bank of Ireland has published a landmark guide to ensure greater protection for consumers of financial services. The Guide to Consumer Protection Risk Assessment applies to all financial services firms in Ireland. This includes banks, insurance companies, investment firms and payment institutions.
For some time now, the CBI has stated that compliance with regulatory codes represents a “minimum standard” and that the firms it regulates need to go well beyond this baseline. The CPRA outlined in the guide demonstrates the CBI’s intention to ensure unfair customer outcomes are prevented and to ensure that firms are not simply “ticking the compliance box”.
Féilim Harvey, PwC Financial Services Partner, said: "“Clearly, the Central Bank believes that there is a strong need for financial services firms to hold themselves accountable to a higher standard than mere compliance. This need is underlined by the recent examples they reference of “significant and systemic issues” such as Payment Protection Insurance mis-selling, and the current examination of Tracker Mortgages, as referenced which are simply not being dealt with by traditional means.
“Financial services firms can now expect to be reviewed by the Central Bank, including interviewing their Boards and Management teams. The guide also calls out that such reviews will be intrusive in nature and will likely be a difficult process for any organisation that focuses on profit maximisation at the expense of fair consumer outcomes.”
The guide sets out a clear expectation that the products and services a firm sells will be managed in a consumer-centric manner. Firms will be assessed on a variety of areas which include:
Sinead Ovenden, Director, PwC Financial Services Practice said: “Irish financial services firms are of significant economic importance to our country. Achieving a truly consumer-centric model should not impact their long term profits.
"Sustainable profits can only be achieved with a sustainable customer base. By eliminating systemic issues that created unfair customer outcomes in the past should create better businesses, focused on sustainable success rather than short term gain.”
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