By 2025 the FMA’s Director of Banking and Insurance Conduct wants to see customers at the centre of financial institutions’ strategy.
Speaking during a podcast produced by the regulator about life under the CoFI regime, Clare Bolingford said she appreciates companies have to make money, but said: “…there isn’t enough focus on the customer and how the customer is supported through the lifecycle of the relationship”.
“I would want to see in the future [that] customers feel they are getting a great service and that when problems do arise they are treated fairly,” she said.
On the subject of fair conduct, Bolingford expects company policies to be quite different depending on the nature of the financial institution.
“You can imagine for a large banking group, for example, a fair conduct programme might not even be one document, it could be made up of many different aspects of how the bank ensures that their customers are treated fairly.
“However, for a smaller insurer, for example, or a credit union, it will be a very different type of programme, where they probably will be able to contain the elements that they need within the fair conduct programme in a much smaller format.”
Bolingford says financial institutions should pay due regard to the customers’ interests and they should be acting ethically, transparently, and in good faith at any point that they deal with a customer.”
She says it’s also going to be “really important” that financial institutions don’t subject customers to unfair pressure or tactics or undue influence.
“What we sometimes see in the sales process, for example, is customers feel under pressure to make a decision, and that’s something firms should not be doing,” said Bolingford.
“Some of the other outcomes we are seeking is that consumers are able to access products and services that are suitable for their needs. It’s about them being supported in the financial decisions that they’re making and able to make good decisions.
“And it’s also about the financial institutions putting customers really at the heart of their business as well, so really considering not only what their product set is, and how they can sell more of that product, but what’s best for the customer and how can they support their financial wellbeing better.”
Read the full transcript here.