BoT urges banks to make service fees fairer, raise data privacy standards

“Receiving fair financial services is regarded as a basic right for all Thais. Overall, Thais are receiving fairer financial services compared to three years ago, while financial service providers pay more attention and give greater importance to fair market conduct,” she said.
“The work in the area of market conduct has progressed somewhat, particularly building a robust supervisory system, which requires conducting intensive multi-approach examinations and real punitive measures against violators, promoting proper product information disclosure to enable consumers to make informed decisions, product and service comparison to enhance competition, leading to fairer fees and better services, as well as raising public financial literacy and awareness against potential financial scams. Insurance cross-selling has also been curbed considerably,” Thanyanit said.
“Nonetheless, there are areas in need of further improvements, which will be our focus. Chief among these include making financial service fees fairer, raising the standard for using customer information, and curbing annoying product offerings. Debt restructuring is another area of focus given challenging prospects of the economy and the country’s relatively high household debt. This part of work will be driven through the Debt Clinic Programme for credit cards and unsecured personal loans. SME debt restructuring together with preventing bad debts will also be a priority area for debt restructuring,” she added.
The central bank has requested all financial service providers to raise work standards. It requires their boards of directors and senior management to place greater importance and attention on fair market conduct, product development and client segmentation, remuneration schemes, sales process, communication and training, data privacy, complaint handling, and having a business continuity plan in place.
There has been progress in various areas. For example, the practice of cross-selling insurance products bundled with housing loans decreased drastically from 67 per cent in 2017 to 7 per cent in 2018, along with the number of complaints filed with BoT. Preventing annoying sales of financial products is another area in which BoT has worked closely with its partners. As an example, a “Gun Guan” mobile application has been developed by the National Broadcasting and Telecommunications Commission, which features the functionality to block unwanted incoming calls, including those from annoying sales and illegal debt collection.
The central bank requires SPs to provide product information in a transparent and easy-to-understand manner. For example, SPs must provide a product catalogue through which clients are informed of alternatives serving their needs without selling pressure, a sales sheet displaying key terms and warnings, and product contracts containing fair terms and conditions. At the same time, invoices and receipts must clearly display details for all items.
The bank aims to use comparative information disclosure to drive fairer market conduct in the future.
As for solving card-debts, the central bank has launched a debt restructuring programme with the multiple-creditor NPL scheme and has recently extended this to include single-creditor cases. By early 2020 the programme will become broader to include cases in court.
Solving SME debts is another crucial task for the bank, given the importance of the SME sector in the economy. Besides, debt resolution in the past focused mainly on bad debts or NPLs. This time, efforts are geared towards assisting borrowers who are still servicing their loans, to prevent these from deteriorating into bad debts.