All hands on deck at financial institutions expected under updated guidelines to treat users fairly

Source: The Straits Times
Author: Ovais Subhani

SINGAPORE - Customers who head to financial institutions (FIs) to place a fixed deposit will not have to face being peddled investment products by staff there, one of the outcomes expected under an updated set of guidelines aimed at enhancing protection for Singaporeans in their dealings with FIs.

The Monetary Authority of Singapore (MAS) said the Guidelines on Fair Dealing aim to raise standards of fair dealing and improve the experience of customers with FIs, such as banks and wealth managers.

Customers can expect financial products that are suited to their needs, advice with suitable recommendations, accurate representation of information and extra consideration for those who are more vulnerable, including customers with physical disabilities or impaired mental capacities, MAS said in a statement.

In addition, FIs are expected to give clear explanations on their products and the terms and conditions, while responding to customer feedback.

First introduced in 2009 under the Financial Advisers Act, the guidelines covered the selection, marketing and distribution of investment products, as well as the provision of advice and post-sales services for these products.

MAS said most FIs have adhered to the core objectives of fair dealing and focus on customer outcomes.

Ms Ho Hern Shin, MAS' deputy managing director for financial supervision, said this update to the fair dealing guidelines reflects the central bank's expectation for all financial institutions to treat all customers fairly.

"This must be a foundational value championed by boards and senior management. Fair dealing should be demonstrated across all activities that impact the customer, from product design to post-sales service. We look forward to financial institutions implementing these guidelines robustly," she said.

Explaining the rationale of the guidelines, MAS said the way financial institutions manufacture, select, market and distribute financial products and services affects their customers' financial decisions.

"Financial institutions should therefore ensure that their business functions are cognisant of the influence on customers' decisions, and have a strong emphasis on fair dealing in their corporate culture."

FIs should duly consider the needs and interests of customers, and act accordingly throughout every aspect of their business to achieve this, from product design and governance, to marketing and sales, and in the provision of after-sales services and complaints handling, it noted.

Meanwhile, the board and senior management of the FIs should set the culture for their financial institutions, determine risk appetites, and put in place governance structures, policies and processes, the central bank said.

MAS expects financial institutions to ensure customers feel they are dealing with FIs where fair dealing is central to the corporate culture and they are being offered products and services that are suitable for them.

It also expects FIs to ensure their customers are served by competent representatives, they receive clear, relevant, and timely information that accurately represent the products and services offered and delivered, and that customer complaints are handled in an independent, effective, and prompt manner.