Kincaid highlights revised Consumer Protection Code amid rising digital risks
Deputy Governor Colm Kincaid of the Central Bank of Ireland emphasized the critical role of the revised Consumer Protection Code in safeguarding consumers amidst geopolitical instability and rapid technological change. Speaking at a workshop, he outlined how the new Code addresses emerging risks from digitalisation and financial crime.
Navigating a world of constant flux
Deputy Governor Kincaid described a period of profound global change, marked by geopolitical instability, rapid technological transformation, and shifting economic conditions.
He noted that while financial innovation offers benefits like instant transfers and broader product access, it also introduces new vulnerabilities for consumers.
Kincaid emphasized that consumer protection is fundamental to the Central Bank of Ireland's statutory mandate, asserting that a financial system failing its consumers ultimately compromises its stability and integrity.
The comprehensive review of the Consumer Protection Code, initiated in 2022, was a proactive measure.
It anticipated that digitalisation and evolving consumer behaviour would necessitate new protections and clearer expectations for firms, rather than being a response to past failures.
This proactive stance, informed by extensive consultation, aimed to design a Code fit for the emerging risk landscape.
Code's shield against digital threats
The revised Code directly addresses the evolving financial risk landscape.
It mandates robust risk management and governance for regulated entities to counter elevated operational risks, including cyber threats.
To combat rising financial crime, the Code explicitly requires firms to protect consumers against frauds and scams and provide support.
Digitalisation's dual nature of opportunity and risk is met with new requirements for consumer-focused design of digital technologies, while remaining technology-neutral.
The Code prohibits firms from using data and AI to exploit consumer behaviours or biases for detriment.
It also improves information provision for key decisions and clarifies firms' obligations regarding unregulated services.
Kincaid highlighted that these are not merely consumer-specific but systemic risks.
A living regime for future challenges
Kincaid underscored that the Code must be a 'living regime,' continuously adapting to accelerating digitalisation and intensifying global challenges.
This necessitates ongoing listening and adaptation by the regulator, alongside a clear responsibility for firms to design consumer-centric products and invest in resilience.
The Code represents the Central Bank's fundamental commitment to mitigating risks and fostering trust for public financial well-being.