CB-UAE Consumer Protection Standards for licensed financial insitutes
...and their impact on organization governance and customer experience
By Taco Nieuwenhuijsen
When The Central Bank of the United Arab Emirates published the Consumer Protection Standards (CPS) last year, we were very eager to learn about the breadth and depth of the 11 articles and what they would concretely mean for consumers and licensed financial institutes.
So we studied all 514 sub-articles in detail and we were not disappointed! While analyzing the articles, it was clear that the UAE Government has the intention to make the United Arab Emirates more attractive for investors, consumers, and potential permanent residents by upgrading its complete financial sector. After all, a reliable and well-governed financial sector is one of the key pillars of building one's future upon.
What do the Consumer Protection Standards entail?
The Consumer Protection Standards (CPS) are laid out in 11 Articles to protect the consumers’ interest at each phase of the consumer's life cycle (e.g. pre-purchase, purchase, post-purchase) in reference to any product and/or service offered by a Licensed Financial Institute (LFI) in the UAE.
Illustrative examples of sub-articles
The level of detail and accuracy that the writers gave to each of the 514 sub-articles leave neither room nor ambiguity for misinterpretation of what is required from each Licensed Financial Institute in the UAE.
“Where a contract with a Consumer has a provision for annual automatic renewal of the contract, the Licensed Financial Institution must send a written notice to the Consumer at least 30 calendar days in advance from the date of renewal. The notice must also inform the consumer how and when the automatic renewal can be canceled.”
Consequences for Licensed Financial Institutes (LFIs)
The Consumer Protection Standards (CPS) are either a burden or an opportunity, depending on the LFIs' response and actions.
The CPS affect the whole organization and all its governance instruments, such as policies, processes, people, and systems.
Although certain organizational functions are more concerned than others, all functions have to be engaged and aligned to ensure robust and sustainable implementation -and application of the CPS.
An integral organization-wide response to the 11 articles provides a great opportunity to become a more customer-centric organization with all attached benefits.
Impact of the 514 Sub-articles on Business Functions
The Suggested Approach to Benefit optimally from implementing the Consumer Protection Standards
Assign a customer-focused leadership role to lead this cross-functional program (e.g. CXO, CMO, CCO, COO).
Appoint on behalf of each internal stakeholder role, one or more Subject Matter Experts.
Conduct a quick scan amongst all internal stakeholders to determine the gaps between the current status and the minimum thresholds as articulated at a sub-article level.
Conduct a priority perception assessment amongst internal decision-makers.
Establish a core project team that will lead all programs and projects and appoint stakeholder champions.
Identify quick wins, articulate short-term improvements, and develop mid-term business cases addressing the more complex cross-functional business topics.
Grouping the 11 articles into homogenous business functions is an organizational challenge due to the heterogeneity of the 11 Articles
Customer Protection Standards and Customer Centricity
At Encompass Marketing Solutions, we have been supporting organizations with the strategic, tactical, and operational aspects of Customer Centricity for many years.
Hence, it will be of no surprise that the Consumer Protection Standards are like music to our ears. Do they cover all aspects of Customer Centricity? The straightforward answer is "No".
However, once a Financial Institute has embedded the majority of sub-articles in its customer journeys and integrated them into its policies, processes, and systems, it will be well on its way to becoming a Customer-Centric organization.
Interested to learn more?
In the case that you are interested to learn more about the eMs approach to address and apply the new CB-UAE Consumer Protection Standards, please contact us for an open-ended conversation.