The central bank yesterday issued proposed guidelines for senior managers and board members on what customers should be able to expect when investing their hard-earned cash:
Customers' interests should be put first.
Unveiling the guidelines - out now for public comment - the Monetary Authority of Singapore (MAS) cited results of a survey it conducted last year.
It found that three in five consumers in the Republic were 'neutral' in their opinion of the quality of service delivered by financial institutions. Only about a third were satisfied with the service.
In a statement, the MAS said the finding 'presents an opportunity for financial institutions to earn the trust and goodwill of consumers'.
The poll of 412 consumers, conducted in March last year, also found that very few were aware of mechanisms for dealing with customer complaints.
'Increasingly, the MAS will be looking to the board and senior management of financial institutions to embed fair dealing outcomes in all their business practices,' said Mr Shane Tregillis, the deputy managing director of the MAS' market conduct group.
These 'fair dealing outcomes' are not rules to be applied rigidly, the MAS said.
So, unlike the Financial Advisers Act, enacted in 2002, which also aims to promote transparency and fair dealing, the guidelines can be interpreted as principles of conduct, it said. This means firms will have flexibility in deciding how best to conduct their financial advisory businesses.
Industry watchers say despite the MAS' efforts to work with the industry to achieve better standards of fair dealing for consumers, there are still cases of bank and insurance clients being ripped off.
Indeed, the MAS noted in the paper that there is 'room for improvement' as the industry continues to receive a steady flow of consumer complaints. 'Financial institutions cannot be complacent.'
Both the Association of Banks in Singapore (ABS) and the Life Insurance Association of Singapore (LIA) backed the 'top-down cultural approach' adopted in the guidelines.
'Our member life insurance companies see it as of utmost importance that their products are appropriately sold on the basis of identified financial needs and with proper and adequate disclosures to the consumer,' said LIA president Mark O'Dell.
ABS director Ong-Ang Ai Boon said Singapore's image as a premier financial centre would be enhanced by adherence to such standards.
United Overseas Bank's executive vice-president for personal financial services, Mr Eddie Khoo, said the bank already has its own guidelines in place to ensure high-quality service and integrity.
Ms Koh Ching Ching, OCBC's head of group corporate communications, said: 'The fair dealing outcomes that the guidelines hope to achieve are not new to OCBC and are already embedded in our policies, practices and processes.'
Mr Ajay Kanwal, the head of consumer banking at Standard Chartered Bank, said the paper is in line with the bank's 'strict measures on governance, assurance, data protection and mis-selling''.
Interested parties can give feedback on the guidelines, available at the MAS website, up till May 21.
gabrielc@sph.com.sg
