CI, together with our Members Which? and Consumer Reports, took the consumer voice to the G20/OECD Taskforce on financial consumer protection consultation event on 15 April, explains CI's financial services expert Nicola O'Reilly (pictured left with Norma Garcia of Consumer Reports).
This was the first event of its kind for the Taskforce which is good news for consumers as we had the opportunity to input into its work.
The occasion revealed new regulatory practices and emerging challenges in consumer protection. The subjects discussed were mobile and online payments, behavioural economics and Treating Customers Fairly (TCF).
Dominic Lindley of Which? provided an excellent presentations on TCF where he set out problems and solutions around sales incentives in financial services.
He also noted that the liabilities resulting from of misconduct such as misselling of payment protection insurance must be factored into risk and stability assessments.
Norma Garcia of Consumer Reports (who has spent the past month based at the CI Office in London) made a really well received presentation on mobile payments.
Norma called for the uneven protections, and the privacy and security concerns relating to mobile payments, to be addressed to promote financial inclusion and improved consumer protection.
We commented on how behavioural approaches can be used to deliver effective consumer protection.
We welcomed the use of behavioural economics to gain insight into consumer behaviour – what moves and motivates consumers to act. It is a real step forward.
We also noted that this should be built upon to deliver significant change by using behavioural approaches in a systematic way.
A one-size fits all approach is ineffective, but using segmentation to recognise distinct behavioural groups can support the development of a suite of interventions that can be used in combination to deliver effective consumer protection which benefits individuals and society.
Social marketing and behaviour change has been delivering benefits in public health for decades cutting road deaths and reducing hospital admissions, tackling addictions and reducing crime by taking a consumer-centred approach. It is great that this is being introduced into financial services too.
The day in Paris was a good opportunity to get our views heard in advance of the written consultation that the Taskforce will issue next month.
This will inform its final report to the G20 Finance ministers which will be delivered in June this year. This will be an ideal opportunity to push for further action on financial consumer protection.
We made the most of the trip to Paris where we met the Chair of FinCoNet who was very positive about increased engagement from CI in this area. We also met colleagues from UniFinance who we will be working with in our forthcoming work on sales incentives.