Poor business practices and an absence of transparency across Ireland’s financial institutions are among the risk factors working against consumers, according to the Central Bank.
In a Consumer Protection Outlook report published on Monday, the regulator identifies five key risk areas facing customers of financial services and makes it clear what it expects firms to do to mitigate against those risks.
The report also highlights the dramatic shift in the landscape financial institutions are operating in and an increased reliance on technology as potential risks for adequate customer care.
It stresses that the “fundamental responsibility” of financial service providers is to provide “good quality service, placing the best interests of the consumer at the centre of how that service is designed and delivered”.
Financial landscape
However, it warns that “poor business practices and weak business processes” can “lead to consumer harm” and highlights how a failure “to give clear information to consumers at any point in the life of a product or service [can] affect the consumer’s ability to make informed decisions”.
The report notes how the financial landscape is “undergoing a number of significant changes [and] firms must navigate this rapid change in a manner that places the best interests of consumers at the heart of their commercial decision-making and avoid creating risks to consumers”.
It says that while technology provides “great opportunities” to improve access to and choice of financial services, firms “must ensure that they take sufficient care to also mitigate the risks of harm to consumers that can arise from the use of those technologies”.
‘Marking the cards’
It also point out that while firms are “looking to innovate and redesign their business model . . . it is imperative that any changes made lead to a better service to consumers and that firms manage the transition for consumers in a responsible, transparent and fair way”.
“Our job is to ensure the financial system is operating in the best interest of consumers and the wider economy,” said the Central Bank’s director of consumer protection, Colm Kincaid.
He told The Irish Times that the report was “marking the cards” of financial institutions and that it would be the “framework for the conversation” the regulator would have with financial institutions in the future.
“It’s about putting the interests of the customer you’re serving at the heart of what you design and deliver,” he said.
Mr Kincaid added that the regulator is looking for the views of the wider public on the nature of the risks they face. “Do people agree with these risks, do they see other risks? People and organisations can contact us directly to provide these views. We are also planning a series of engagements with stakeholders over the coming months. The information people provide us will shape our work and the expectations we set for the firms we regulate in the years ahead.”
