By GIFT NDOLWANE
JOHANNESBURG – SOUTH African financial service providers (FSPs) have been urged to comply with the imminent legislation promoting fair treatment, or risk punishment by regulators.
The Treating Customers Fairly (TCF) regulatory framework is likely to impose substantial punitive measures on non-complying FSPs in the form of stiff financial penalties and licence sanctions – measures that could result in reputational damage and other consequences detrimental to business.
Expert Adré Schreuder, explains the cost of regulatory non-compliance in countries where the TCF framework has been adopted has increased substantially in recent years. This is likely to continue, with similar expectations for the local market.
“The reputational damage of being exposed as an FSP that treats its customers unfairly would far outweigh any financial penalties,” Schreuder, Chief Executive of Consulta, says.
The management consulting firm, in partnership with DàIL Consulting, have introduced a Fair Customer Conduct Blueprint (FCCB) to enable FSPs to prepare for the pending implementation of the TCF.
The FCCB is a toolkit that has been designed to assist FSPs in incorporating the TCF requirements into an integrative framework that will ensure holistic customer, business, and regulatory outcomes. It will enable FSPs to assess and evaluate their current progress towards customer centric transformation – which is essentially the intended outcome of TCF.
Ineke Prinsloo, Director at DàIL Consulting, says TCF will require FSPs to provide a portfolio of evidence showing that the fair treatment of customers has been considered, measured and tracked.
“It must also show that ongoing enhancements, underpinned by customer insights, are continuously implemented throughout the business, at all stages of the product and service life cycle,” says Prinsloo
Set to come into effect on May 1, TCF is a set of outcomes-based principles intended to improve market conduct in financial services.
It forms part of the Financial Sector Regulation Bill, which gives effect to the new “Twin Peaks” model of regulation aimed at achieving a stable financial system and increase consumer confidence in the financial services sector.
– Guardian