Bank Negara raises the bar for Financial Services Providers in Treatment of Financial Consumers

24 April 2024

1. paragraph 8.1(g) - responsibility to implement measure to deliver Outcome 7: Fair and equitable treatment of vulnerable consumers; 


2. paragraph 10.3(f) - responsibility of senior management to ensure that measures taken to embed fair treatment of financial consumers into all stages of the product life cycle adheres to the requirements under paragraphs 16.1 to 16.28; 


3. paragraph 10.3(g) - responsibility of senior management to establish and maintain appropriate policies, processes and accountability structures that assist staff, representatives and agents to meet the needs of vulnerable customers when carrying out their roles; 


4. paragraph 10.4 - requirement that measures taken to implement paragraph 10.3(g) should promote a business culture that recognises that existing and prospective customers may or are already facing vulnerabilities, and reward good behaviour and actions by staff, representatives and agents who are able to respond effectively to the specific needs of vulnerable consumers; and 


5. paragraphs 16.1 to 16.28 - standards and guidance comprised in Principle 7 that ensure fair and equitable treatment of vulnerable consumers. 

1. a licensed bank;
2. a licensed Islamic bank;
3. a licensed insurer;
4. a licensed takaful operator;
5. a prescribed development financial institution;
6. an approved issuer of a designated payment instrument;
7. an approved issuer of a designated Islamic payment instrument;
8. an approved insurance broker;
9. an approved takaful broker;
10. an approved financial adviser; and
11. an approved Islamic financial adviser. 

1. “persons with disabilities” has the same meaning assigned to it in the Persons with Disabilities Act 2008; and 


2. “vulnerable consumer” refers to a financial consumer who: 

• may face challenges in accessing financial services or may require assistance to engage in financial services, for example, a person with disabilities or a senior citizen¹; 


• has a low ability to withstand financial shocks, for example, a person who is overly-indebted or has no savings; 


• is experiencing or has experienced adverse life events resulting in temporary or long-term financial hardship, for example, natural disasters, temporary loss of income, unemployment, or the death/ total permanent disability of the main breadwinner; or 


• has an inadequate level of financial literacy or experience in using financial services or products, or poor language skills, for example, a person who only speaks a language other than Bahasa Malaysia or English, is illiterate, or is not digitally savvy. 

1. demonstrate a commitment to fair treatment of vulnerable consumers (paragraph 10.3(d)); 


2. ensure that engagements by staff with vulnerable consumers adheres to the requirements set out in paragraphs 16.1 to 16.28 of the Revised Policy Document (paragraph 10.3(f)); and 


3. establish and maintaining appropriate policies, processes and accountability structures that assist staff, representatives and agents to meet the needs of vulnerable consumers when carrying out their roles (paragraph 10.3(g)). 

1. understand the needs of vulnerable consumers and ensure its staff, representatives and agents have the right skills to take appropriate actions throughout the entire product life cycle to be able to deliver fair outcomes to vulnerable consumers; 


2. assess the needs of vulnerable consumers in its existing financial consumer base and target market, as well as implement appropriate policies and procedures to meet these needs so as to ensure that vulnerable consumers are treated fairly in accordance with the requirements in the Revised Policy Document throughout their engagement and dealings with the FSP. The FSP must also ensure that the policies and procedures are clearly communicated to the relevant staff, representatives and agents so that they are implemented effectively; 


3. refrain from engaging in predatory practices in their dealings with vulnerable consumers, including sales and marketing practices that exploit vulnerable consumers such as providing misleading information on risks and returns, which could lead to vulnerable consumers buying unsuitable or complex products which are not in line with their needs or financial circumstances; 


4. exercise due care when adopting artificial intelligence and machine learning in credit assessments and risk underwriting to avoid unfair discrimination, excessive pricing or exclusion of vulnerable consumers from accessing essential financial services and products; 


5. ensure that relevant information about the needs of vulnerable consumers is properly captured or recorded in a manner that would enable the FSP to meet the needs of such consumers promptly and consistently, and is accessible by staff who may need to refer to such information; 


6. provide its financial consumers with information that is easily accessible on how they can obtain assistance in the event they encounter sudden life events that places them in vulnerable circumstances, such as the death or permanent disability of the household’s main breadwinner due to illness or accident; 


7. ensure communication with vulnerable consumers throughout the product life cycle is clear and easily understood by vulnerable consumers; the FSP must periodically test and verify the effectiveness of its communication channels for vulnerable consumers and adapt appropriately, where necessary, to ensure the communication channels remain accessible to vulnerable consumers throughout the product life cycle. The FSP must also ensure that vulnerable consumers are made aware of the different communication channels available to enable them to communicate with the FSP through a channel they find most effective and convenient; and 


8. regularly monitor and evaluate whether its staff, representatives and agents are responding to the needs of vulnerable consumers and take appropriate actions to address any poor outcomes or make necessary improvements to ensure vulnerable consumers receive fair and equitable treatment.