Financial Crime World

Balanced View When Selling a Product or Service: A Guide for Banks and Financial Institutions

In an effort to promote fair and responsible treatment of customers, the Bangko Sentral ng Pilipinas (BSP) has implemented guidelines for banks and financial institutions (BSFIs) to ensure that their sales practices are balanced and customer-centric.

Establishing a Code of Conduct

To achieve this goal, BSFIs must establish a Code of Conduct that outlines the organizational values and standards of professional conduct. The code should be reviewed and approved by the Board and signed by all staff members, who acknowledge their commitment to abide by its principles.

  • Measures to determine whether consumer protection principles are observed
  • Client concerns are addressed
  • Problems are resolved in a timely manner
  • Regular customer satisfaction surveys
  • Training programs for staff on fair and responsible treatment of clients

Financial Needs Analysis (FNA) and Client Suitability

BSFIs must conduct an FNA and assess the client’s suitability for specific investment products. This involves reviewing the client’s:

  • Risk profile
  • Financial situation
  • Investment objectives
  • Determining whether the recommended product is suitable for them

Institutional Culture of Fair and Responsible Treatment of Clients

To foster a culture of fairness and responsibility, BSFIs must implement measures to ensure that staff are trained on:

  • Customer service skills
  • Conflict resolution
  • Ethical behavior
  • Disseminating the institution’s code of conduct to clients through printed media or other appropriate means

Remuneration Structure

The remuneration structure for staff should encourage responsible business conduct, fair treatment, and avoidance of conflicts of interest. BSFIs must disclose the remuneration structure to customers where necessary.

  • When potential conflicts cannot be managed or avoided
  • Disclosure of remuneration structure

Effective Recourse

BSFIs must establish an effective Consumer Assistance Management System (CAMS) that allows customers to easily report complaints and receive timely responses. The institution should also maintain a log of all complaints, conduct regular analysis of complaint patterns, and provide adequate resources to handle financial consumer complaints efficiently.

  • Easy reporting of complaints
  • Timely responses
  • Log of all complaints
  • Regular analysis of complaint patterns
  • Adequate resources to handle complaints

Financial Education and Awareness

Financial education initiatives are essential for empowering consumers to make informed financial decisions. BSFIs must establish a clear and defined financial education program as part of their corporate governance strategy.

  • Designed to meet the needs and financial literacy level of target audiences
  • Contribution to improvement of clients’ knowledge and understanding of their rights and responsibilities

Conclusion

BSFIs play a critical role in promoting fair and responsible treatment of customers by ensuring that their sales practices are balanced and customer-centric. By implementing these guidelines, BSFIs can demonstrate their commitment to protecting consumers and promoting financial inclusion.