THE Central Bank published its Consumer Protection Outlook Report for 2022 on the 14th of March. The report identified the five key cross sectoral risks facing consumers of financial services, aligned to the Central Bank’s Strategy which was published in September 2021.

The five key cross sectoral risks identified are:

  • Poor business practices and weak business processes
  • Ineffective disclosures to consumers
  • The changing operational landscape
  • Technology-driven risks to consumer protection
  • The impact of shifting business models

The report highlights that where firms do not have adequate processes and procedures to mitigate operational risks, this can have a severe impact on the quality and availability of service provided to consumers.

The Central Bank expects firms to:

  • Put in place robust product governance and oversight arrangements covering the design, sale and delivery of the product.
  • Design and bring products to market in a responsible way with features, charges and risks that meet the needs of the individual consumers identified for the product.
  • Comply with the legislative requirements to assess the suitability of their products and services to each individual consumer.
  • Be clear on the reasons why a product or service is being offered to a consumer and why it is suitable for that consumer.
  • Monitor products over time to ensure the product is performing as intended and remains suitable for the target market.
  • When errors or operational incidents occur, ensure that consumers are treated fairly and put back in the position they would have been in had the error or incident not occurred. z Ensure proper resources are deployed to deliver a high-quality service.
  • Place the best interests of consumers at the heart of their commercial decisions and how they provide services to consumer.

In relation to ineffective disclosure to consumers, the report outlines that where a financial service provider presents information poorly or does not explain it properly, it can be difficult for consumers to assess the benefits, costs and risks of the options available.

Where a firm fails to properly communicate exclusions, products may not meet the consumer’s reasonable expectations, leading the consumer to believe that they have made provision for some aspect of their future needs when in fact they have not.

It was noted that this is of particular relevance to insurance. It is also important in respect of other types of financial product such as investment products where clarity is needed on when and how a given product will (or will not) provide a return on the consumers’ investment.

The Central Bank expects firms to:

  • Provide clear information in a timely manner to consumers, disclosing the key information upfront (i.e., risks and benefits, fees and costs).
  • Support consumers in making fully informed decisions by ensuring that information is provided in a way that it can be easily understood.
  • Ensure that statements of suitability and other disclosures provided to consumers are fully compliant with legislative requirements.
  • Disclose exclusions to financial products in an effective manner at the outset to support consumers in making good decisions.
  • Ensure disclosure is as clear on digital media as with more traditional communications channels.
  • Avoid greenwashing by producing disclosure documents that are clear, not misleading and fully compliant with the most recent legislative disclosure requirements.

New business models and products, globalisation and digitalisation are among some of the many changes shaping the landscape in which regulated financial service providers operate.

Regulated firms must also play their part in supporting the move to a greener financial system in order to combat climate change. Risks identified are that if firms do not keep pace with these changes, that regulated firms will not be able to meet their responsibility to help their consumers to navigate this landscape.

The Central Bank expects firms to:

  • Actively identify and address risks to consumers that may potentially emerge from changes in the landscape within which the firm and/or its consumers are operating.
  • Have sufficient operational resilience to manage change without creating risks to consumers.
  • Engage with financial innovation from the perspective of consumers’ needs and best interests.
  • Clearly delineate for the consumer between regulated and unregulated products, especially where they are offered within the same digital environment. This is especially important in the case of unregulated products carrying special risks such as virtual assets.

It is noted that cyberattacks have become more sophisticated, more frequent, more targeted and progressively more difficult to detect. Attacks can lead to the compromise or loss of consumers’ personal data, including sensitive information relating to the individual.

The Central Bank expects firms to:

  • Have well-defined and comprehensive information technology and cybersecurity risk management frameworks, supported by sufficient resources to achieve resilience and protect the interests of consumers.
  • When designing and providing financial products digitally, ensure consumers’ needs and interests are central to the firm’s considerations and that the product will only be provided to consumers for whom it is suitable.
  • Have effective measures to mitigate the risk of fraud and scams and be proactive in identifying and dealing with cases of fraud or scams including engaging effectively with consumers affected.
  • Demonstrate that they have appropriate oversight of any delegated or outsourced arrangements and can provide evidence that the risks associated with outsourcing and delegation have been appropriately considered and are being managed effectively.

Given the current change in business models, firms are reminded of the importance of adopting a consumer centric approach to how they develop their businesses.

The Central Bank expects firms to:

  • Proactively assess the risks and consumer impact a commercial decision may pose to new and existing customers and develop comprehensive action plans to mitigate these risks whilst ensuring that customers understand what changes mean for them.
  • Have the customer service capacity and structures in place to meet expected service levels to provide a timely and customer-focused service through all channels.
  • Consider the impact of their decisions on vulnerable customers and provide the assistance necessary. This should include specific and effective processes and communication plans to support vulnerable customers.
  • Only design and bring to market products with features, charges, and risks that meet the needs of consumers identified for the product.

The Central Bank has advised that they will undertake a programme of active engagement with key stakeholders including Brokers Ireland in relation to the report.

If members have any feedback on the report (copy available in the Compliance section of the Brokers Ireland website), please contact the Compliance department by emailing

Source: “Consumer Outlook Report 2022”, Central Bank of Ireland, 14 March 2022