Central Bank readies new regime to make individuals accountable

Framework will allow regulator take enforcement cases where standards not met

Making it easier to hold senior individuals in financial services accountable and advising on new regulations governing hire purchase/PCP credit will be two of the Central Bank’s main consumer-protection focuses this year.

Launching the regulator's consumer-protection outlook report for 2021 on Monday, director of consumer protection Gráinne McEvoy said: "Protecting consumers carries across all aspects of our work in the Central Bank. It is core to what we do and who we are."

Ms McEvoy urged financial services firms to remain “proactive and vigilant in their planning and mindful of the risks to consumers that arise in these uncertain times”.

The regulator set out six key risks facing consumers, including the absence of a consumer-focused culture; ineffective disclosure; unfair practices and behavioural vulnerability; and mis-selling and inadequate suitability assessment.

A key element of the regulator’s work this year will be providing technical advice on planned legislation to introduce a regulatory regime for hire purchase/personal contract plan (PCP) and other forms of credit in the Irish market.

It is also working with the Department of Finance on the development of the proposed individual accountability framework. This aims to achieve better outcomes for consumers and investors, and to improve the sustainability of the financial system, by giving the regulator additional powers.

These will allow the Central Bank to take enforcement cases where individuals and firms are not meeting expected standards. The proposed senior executive accountability regime will require firms to set out clearly where responsibility and decision-making lie. It is expected that this will make it easier for the regulator to hold individuals accountable.

The regulator also expects to develop proposals to extend minimum competency rules to credit unions. These rules set out minimum professional standards for persons providing certain financial services, in particular when dealing with consumers.


Last year the regulator published its interim report into dual pricing or differential pricing in the insurance sector, examining how and why insurers charge different rates for different customers. Its review of this practice will continue this year, and once concluded the Central Bank will publish a report and/or a consultation on proposals for reform, as appropriate.

Also on insurance, the regulator will undertake a review of the use of telematics in the industry. This is where insurers use a device in a car to measure metrics such as speed and severity of braking and acceleration. It will also start a review of how the ongoing suitability of long-term life-assurance products is monitored.

Also on the agenda for 2021 is a continuation of the regulator’s “substantial” review of the consumer-protection code. This will include a public consultation seeking views and evidence to inform this review.

Monitoring the use of complex products by retail investor clients will also be part of the Central Bank’s focus. It found, in the early weeks of the pandemic, that the average number of retail accounts opened increased by 116 per cent compared with January 2020, while the average number of daily trades increased significantly by 171 per cent.

In addition, the firms surveyed all reported an increase in the percentage of retail clients losing money in the period.

The Central Bank will also this year publish research on pension behaviours and decisions; how consumers engage with digital financial products and services; and first-time buyer experience of the mortgage application process.