The Banco de Portugal establishes best practice to enhance information transparency on digital channels

The Banco de Portugal published the Circular Letter No CC/2020/00000044, which establishes a set of recommendations to be adopted by credit institutions, financial companies, payment institutions and electronic money institutions when selling retail banking products and services through digital channels (particularly bank deposits, credit products, payment services and electronic money).

These recommendations aim to:

• ensure that bank customers are provided with complete and appropriate information on these products or services and their characteristics, when these products or services are being sold through digital channels;
• enable institutions to know in advance the guidelines issued by the Banco de Portugal, facilitating technological choices for the selling of retail banking products through digital channels;
• make the oversight of marketing processes on digital channels swifter and timely.

The Circular Letter has been issued following the European Banking Authority opinion on transparency of the information to be provided to consumers of financial services on digital channels (Opinion of the European Banking Authority on disclosure to consumers of banking services through digital means under Directive 2002/65/EC). It also systematises the best practice the Banco de Portugal, in its role as banking conduct supervisor, has addressed to the supervised institutions in this field.

Circular Letter Content   

The recommendations in the Circular Letter aim to weight on the manner in which institutions must comply with their duties in the scope of selling retail banking of products and services through digital channels, without intending to expand or replace the legal and regulatory framework especially applicable to the conduct of supervised institutions.

Through this Circular Letter, the Banco de Portugal provides:

• General recommendations that must be observed throughout the marketing process, highlighting, for example, the need for institutions to ensure that:
  • the font size used on the screens of the marketing platform allows for better readability;
  • the colours or images adopted do not make it difficult for bank customers to read the information;
  • the use of hyperlinks does not fragment information about the banking product or service;
  • when a brand is used, that brand is accompanied by the identification, with a similar prominence, of the institution responsible for the product or service.
• Specific recommendations, which are applicable in certain phases of the marketing process (general pre-contractual stage, personalized pre-contractual stage, contract conclusion stage and post-sale stage) and which strive for the institutions to guarantee: 
  • that the information on the banking product or service being marketed  is presented separately from information about an additional or ancillary product or service;
  • compulsory scroll down of mandatory information documents;
  • robust methods for confirming the bank customers’ willingness to buy the product or service;
  • the existence of a dedicated and easily accessible space for bank customers to exercise their right of withdrawal and early repayment on the product’s marketing platform;
  • the provision of information, in a dedicated space on the marketing platform, on the means available to bank customers for filing a complaint and resorting to alternative dispute resolution procedures.
     

Preparation of the Circular Letter

The draft Circular Letter was submitted for public consultation between 16 March 2020 and 30 April 2020 and the contributions received were analysed, taken into consideration and, where accepted, are reflected in the wording of the Circular Letter published today.

The public consultation report has also been released by the Banco de Portugal.