The FSCA advocates for the wellbeing of financial customers through fair treatment
The FSCA now supervises the conduct of financial institutions and their customer interaction
The Financial Sector Conduct Authority (FSCA) has taken up its new mandate from the former Financial Services Board (FSB) to ensure that financial institutions treat their customers fairly, while ensuring that those institutions remain sustainable.
The FSCA is on a mission of advocating for the financial wellbeing of customers by familiarising them with the principles in the Treating Customers Fairly initiative (TCF).
The aim is to educate financial customers about the standard of quality they are entitled to when purchasing products and services from financial institutions.
As the market conduct regulator, the FSCA’s broadened mandate now includes: enhancing the efficiency and integrity of financial markets; promoting fair customer treatment by financial institutions; providing financial education and promoting financial literacy; and assisting in maintaining financial stability.
“The FSB was solely responsible for non-banking financial institutions, while the FSCA supervises the conduct of financial institutions and how they interact with customers. While we look at how financial institutions treat their customers, we also have to make sure they are financially stable,” says Kedibone Dikokwe, FSCA divisional executive of conduct of business supervision.
Dikokwe says that the authority has launched its free MyMoney Learning Aeries to educate consumers on financial matters. Available as e-learning content, it includes foundational concepts such as good financial habits, as well as advanced topics such as understanding investments. This helps consumers make informed decisions when purchasing products and services.
The FSCA continues its work of aligning regulation with the outcomes that will eventually lead to the increased fair treatment of customers and establish a regulatory framework that reflects the support of the TCF initiative. This will be achievable as the Financial Sector Regulation Act allows the authority to use its rule-making capacity to entrench the fair treatment of customers.
The fair treatment of customers underpins the regulatory and supervisory approach that seeks to achieve specific outcomes for financial customers.
The six guiding principles that TCF is built around are:
- culture and governance;
- product design;
- clear communication;
- suitable advice;
- performance and standards; and
- claims, complaints and changes.
According to Tembisa Marele, the FSCA head of communications, it’s important to educate the customer and let them be part of determining how they are treated.
“This is part of the reason the authority focuses on monitoring whether institutions are aware of the financial backgrounds of the customers they are selling their products to. Before selling a product, you should interrogate the quality of that product, and know the circumstances of the person you’re selling it to,” Marele says.
“As the market conduct authority, we are geared towards producing outcomes and helping you as an institution manage your risks. Ultimately, if your customer is not getting what they need from you, this affects you in the long run,” she says.
For more information, visit the FSCA website.
This article was paid for by the Financial Sector Conduct Authority.
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