EBA欧洲银行-EBA-Report-on-the-application-of-the-guidelines-on-POG-arrangements_24页_892kb

EBA Report on the Application of the Guidelines on Product Oversight and Governance (POG) Arrangements

Executive Summary

The European Banking Authority (EBA) aims to promote a transparent, simple, and fair internal market for consumer financial products and services. As part of its 2019 work programme, enhancing consumer protection and retail conduct of financial institutions were key priorities. The EBA developed detailed POG guidelines in 2015, which became applicable in 2017, to ensure that financial institutions design and distribute products with the consumer's interests in mind. These guidelines are intended to prevent consumer detriment and reduce the need for ex post intervention by competent authorities (CAs). The EBA conducted a supervisory convergence exercise to assess the application of these guidelines across the EU, identifying good practices and areas needing improvement. The review highlighted the need for further clarification to achieve consistent regulatory practices.

Core Content and Key Findings

• Scope of the Guidelines: The POG guidelines apply to manufacturers and distributors of retail banking and payment products, including payment and savings accounts, payment instruments, payment services, debit/pre-paid cards, and mortgage credits (with other credit products included only if provided by credit institutions). They apply to all new or significantly changed products introduced after 3 January 2017, as well as to existing products that undergo major changes after that date.

• Good Practices Identified:

  • Manufacturers have established defined structures and clear escalation lines.
  • Risk and compliance functions are involved in the oversight process.
  • Some manufacturers have integrated POG requirements with internal governance processes.
  • Explicitly defining negative criteria (i.e., what does not constitute a new or significantly changed product) is considered good practice.
  • Including criteria such as alternative channels, product/service features, customer segments, and changes affecting daily use is recommended.

• Areas for Improvement:

  • Many manufacturers focused more on prudential and commercial risks rather than on consumer needs.
  • There was a lack of consistent understanding of the guidelines across the industry and among Member States (MSs).
  • The number of products considered new or significantly changed varied significantly, with some manufacturers applying very broad or narrow criteria.

• Supervisory Convergence:

  • The EBA is working to ensure supervisory convergence, which aims to achieve consistent supervisory practices across MSs based on compliance with the regulatory framework.
  • The review found significant similarities in the application of the guidelines across jurisdictions, indicating a potential for broader applicability.

• Target Market Identification:

  • Manufacturers identified target markets using a variety of criteria, including demographics, financial capability, and product complexity.
  • The EBA recommends a more comprehensive approach, especially for complex products, to ensure the product meets the needs and characteristics of the target market.

• Customer Needs Assessment:

  • While some manufacturers conducted customer research, many focused on commercial viability rather than consumer needs.
  • The EBA emphasizes the importance of assessing whether products meet the interests, objectives, and characteristics of the target market, not just whether they can be sold.

Main Viewpoints

• The EBA's POG guidelines aim to ensure that financial institutions consider consumer needs in product design and distribution.
• The guidelines are forward-looking and seek to prevent consumer harm by promoting responsible product governance.
• Supervisory convergence is essential to ensure consistent application of the guidelines across the EU.
• The EBA encourages clarification of the guidelines to improve understanding and application across the industry.
• There is a need for a more balanced focus between prudential concerns and consumer interests in the implementation of the guidelines.

Key Information

• The EBA GL on POG became applicable in January 2017.
• The guidelines apply to credit institutions, payment institutions, e-money institutions, and mortgage creditors/intermediaries.
• The EBA conducted a survey of 30 credit institutions across 28 MSs.
• The report focuses on five areas: scope and governance, target market, testing, monitoring, and distribution.
• The EBA is considering further actions, such as guidance and clarifications, to address identified issues.

Conclusion

The EBA found that while most manufacturers have implemented POG arrangements, there is a need for greater emphasis on consumer needs and more consistent interpretation of the guidelines. The review highlighted the importance of aligning product design and distribution with the interests and characteristics of the target market, as well as the need for supervisory convergence to ensure a level playing field across the EU. The EBA will use these findings to inform future guidance and clarification efforts.