Poor business practices in financial services pose risk to consumers, warns Central Bank

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According to the Central Bank, poor business practices and a lack of transparency in Irish financial institutions are among the risk factors harming consumers.

In a consumer protection outlook report released on Monday, the regulator identifies five key areas of risk facing financial services customers and makes clear what it expects from companies to mitigate those risks.

The report also highlights the radical change in the landscape in which financial institutions operate and an increased reliance on technology as potential risks to adequate customer service.

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 center of the design and delivery of that service”.

Financial landscape

However, he warns that “poor business practices and weak business processes” can “harm consumers” and highlights how failure to “give clear information to consumers at all times in the life of a product or ‘a service [can] affect the consumer’s ability to make informed decisions.

The report notes that the financial landscape “is undergoing a number of significant changes [and] companies must navigate this rapid change in a way that puts the best interests of consumers at the heart of their business decision-making and avoid creating risks for consumers”.

It says that while technology offers “great opportunities” to improve access to and choice of financial services, companies “must ensure that they take sufficient care to also mitigate the risk of harm to consumers that may arise from the use of these technologies”.

“Marking the Cards”

He also points out that if companies “are looking to innovate and rethink their business model. . . it is imperative that any changes made lead to better service to consumers and that companies manage the transition for consumers in a responsible, transparent and fair manner.”

“Our job is to ensure that the financial system operates in the best interests of consumers and the wider economy,” said the central bank’s consumer protection director, Colm Kincaid.

He told the Irish Times that the report “marked the cards” for financial institutions and would form the “conversational framework” the regulator would have with financial institutions in the future.

“It’s about putting the interests of the customer you serve at the heart of what you design and deliver,” he said.

Mr Kincaid added that the regulator is seeking the views of the general public on the nature of the risks it faces. “Do people agree with these risks, do they see other risks? Individuals and organizations can contact us directly to provide these views. We are also planning a series of stakeholder engagements over the coming months. The information people provide to us will shape our work and the expectations we set for the companies we regulate in the years to come. »

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