Circular No. 1048 or the BSP Regulations on Financial Consumer Protection seeks to fundamentally strengthen market conduct practices of Bangko Sentral ng Pilipinas’ (BSP) supervised financial institutions (BSFIs) by establishing guidelines that institutionalize consumer protection as an integral component of corporate governance and culture, as well as risk management.
This is part of the BSP’s commitment to promote broad and convenient access to high quality financial services and consider the interest of the general public, as mandated by its amended charter. In doing so, the BSP aims to ensure that financial service providers conduct ethical business practices and do not engage in practices that may cause harm to the consumer in the conduct of their business. The consumer protection standards of conduct, i.e., disclosure and transparency, protection of client information, fair treatment, effective recourse mechanism, and financial education and awareness should be embedded into the corporate culture of the BSFI, enhancing further its defined governance framework while addressing conflicts that are inimical to the interests of the financial consumer.
BSFIs must ensure that their consumers have a reasonable holistic understanding of the products and services which they may be acquiring or availing. In this context, full disclosure and utmost transparency, to the extent allowed under applicable laws and regulations, are the critical elements that empower the consumer to make comparisons and informed financial decisions. This is made possible by providing the consumer with ready access to information that accurately represents the nature and structure of the product or service, its terms and conditions, as well as its fundamental benefits and risks.
Full text of the BSP Regulation on Financial Consumer Protection
Financial consumers have the right to expect that their financial transactions, as well as relevant personal information disclosed in the course of a transaction, are kept confidential and are secured. Towards this end, BSFIs must ensure that they have well-articulated information security guidelines, well-defined protocols, a secure database, and periodically re-validated procedures in handling the personal information of their financial consumers. This should be an end-to-end process that should cover, among others, the array of information that will be pre-identified and collected, the purpose and manner of gathering each information, the Information Technology (IT)-security infrastructure of the BSFI, and the protocols for disclosure, both within the BSFI and especially to third parties.
Full text of the BSP Regulation on Financial Consumer Protection
This principle ensures that financial consumers are treated fairly, honestly, and professionally at all stages of its relationship with the BSFI. BSFIs shall adopt mechanisms to safeguard the interest of their consumers which shall include rules regarding ethical staff behavior, acceptable selling practices, fair and equitable terms and conditions, provision of products and services appropriate to the capacity and risk appetite of the consumers, among others, and incorporate the same in their policies and procedures, control functions and agreements with outsourced third parties.
Full text of the BSP Regulation on Financial Consumer Protection
Financial consumers should be provided with accessible, affordable, independent, fair, accountable, timely, and efficient means for resolving complaints with their financial transactions. BSFIs should have in place mechanisms for complaint handling and redress, and may employ various modalities or technological innovations.
Full text of the BSP Regulation on Financial Consumer Protection
Financial education initiatives give consumers the knowledge, skills, and confidence to understand and evaluate the information they receive and empower them to make informed financial decisions.
Because BSFIs deal directly with financial consumers, they have the reach, expertise, and established relationships ideal to deliver financial education, distinct and separate from information about their products. BSFIs should provide basic information on consumers’ and the BSFI’s rights and responsibilities.
BSFIs should demonstrate efforts at financial education, which may include digital literacy for products offered electronically, with the presence of programs whether as specific initiatives or as aspects embedded in their regular interface with consumers.
Full text of the BSP Regulation on Financial Consumer Protection
