The Conduct of Financial Institutions regime has come into full effect with the FMA saying it expects banks, insurers and non-bank deposit takers to put New Zealand consumers at the forefront of their decisions and actions.
FMA Director of Deposit Taking, Insurance and Advice, Michael Hewes says CoFI is fundamentally about treating customers and potential customers fairly – this is the fair conduct principle.
“We expect financial institutions to be analysing how their products are performing, communicating effectively with consumers and acting quickly if something is not working as it should be.”
The authority says that as part of their licensing requirements, financial institutions are required to establish, implement and maintain a fair conduct programme.
“The programme needs to be designed in a way that ensures their compliance with the fair conduct principle, and they need to display summary information about it on their website so consumers can understand how their chosen provider should be treating them.”
The FMA says its supervision of financial institutions under CoFI will use the full spectrum of tools available to it, including:
- Engagement meetings
- Monitoring reviews
- Thematic reviews looking at key issues across the sector
“In line with our outcomes-focused approach as a regulator and the principles-based nature of the CoFI regime, our focus will be on the outcome of financial institutions treating consumers fairly, while giving firms flexibility, where appropriate, with how they achieve this.”
The authority also thanked the financial institutions for their efforts in getting licensed by 31 March.
…In total 77 [financial institutions] have been licensed by the FMA – 17 banks, 46 insurers and 14 non-bank deposit takers…
“In total, 77 have been licensed by the FMA – 17 banks, 46 insurers and 14 non-bank deposit takers (credit unions, building societies and some finance companies). We have been working closely with them throughout the process and will continue to listen, provide guidance and communicate our expectations.”
It adds that New Zealanders should have access to the financial products and services they need “…when they need them, and have trust and confidence that products and services will perform as expected and meet their needs. We expect CoFI to achieve that.”