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Joint ESAs Consumer Protection Day Summary

Core Content

The Joint ESAs Consumer Protection Day was held in Prague on 23 June 2017, marking the first time the event was not hosted in Paris, Frankfurt, or London. Organized by the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA), and European Securities and Markets Authority (ESMA), the event aimed to foster open dialogue with key stakeholders, especially consumer representatives, to enhance consumer protection in the European financial sector.

Main Objectives and Key Points

• Stakeholder Engagement: The event emphasized the importance of listening to consumers and other stakeholders to shape effective policies.
• Regional Focus on CESEE: The decision to hold the event in Prague was influenced by the European Consumer Organization (BEUC), highlighting the need for greater attention to consumer protection issues in Central, Eastern, and Southern Eastern European (CESEE) countries.
• Consumer Protection Challenges in CESEE: These countries have faced specific issues such as foreign currency loans, lack of access to basic payment accounts, and unsuitable investment advice, which have not been adequately addressed by national authorities.
• Need for Strong Enforcement: Even with a robust regulatory framework, effective enforcement and measurable progress are essential to protect consumers.
• Single Market and Regulatory Convergence: The ESAs aim to support the Single Market through a unified regulatory framework (Single Rulebook) and convergence in supervisory practices.
• Consumer Protection in the Digital Era: The increasing role of technology and digitalization in financial services presents both opportunities and risks, requiring careful oversight to prevent consumer detriment.

Key Topics and Initiatives

• Product Oversight and Governance: The ESAs have developed common principles requiring financial product manufacturers and distributors to consider consumer needs in product design and distribution.
• Complaint Handling: Uniform requirements for handling complaints by financial institutions have been established, regardless of location or product type.
• Robo-Advice and Automation: The EBA, EIOPA, and ESMA have analyzed the implications of automated financial advice, focusing on both benefits (cost reduction, wider access) and risks (algorithm flaws, unclear liability, lack of consumer understanding).
• FinTech and Innovation: The ESAs have been actively monitoring financial innovation, including FinTech, InsurTech, crowdfunding, and AI, to ensure consumer protection is maintained.
• Mis-selling and Conflict of Interests: Despite previous efforts, issues like mis-selling and conflict of interests persist, especially in the context of self-placements by banks.
• Regulatory and Supervisory Impact: The ESAs have emphasized the importance of their own initiative guidelines in promoting consistent and effective supervision across the EU.

Future Priorities

• Digital Transformation: The ESAs are preparing to address the challenges and opportunities posed by digital technologies in financial services.
• Continued Focus on Traditional Issues: While embracing innovation, the ESAs remain committed to resolving traditional consumer protection concerns.
• Policy Development: The event served as a platform to gather insights for future policy development, including the potential impact of regulatory changes on consumer protection.

Conclusion

Andrea Enria, Chairperson of the EBA, stressed the importance of maintaining and enhancing consumer protection in the evolving financial landscape. She highlighted the need for stronger enforcement mechanisms and the role of the ESAs in promoting convergence and transparency in financial supervision. The event concluded with a commitment to listening to stakeholders and using their input to guide future actions.