On 10 June 2020, the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) published a news item with regard to the impact of the corona crisis on the needs of consumers and the functioning of financial products.
According to the AFM, the way in which a financial product works from the customer’s perspective may have changed due to the corona crisis. Some consumers may be more in need of certain (adjustments within) financial products, such as insurance or credit solutions, to temporarily absorb the financial consequences of the corona crisis. The AFM recommends that providers of financial products should use the so-called ‘KNVB assessment framework’ (KNVB-toetskader) when evaluating their products (and the services relating to the product). This framework allows providers to test for cost efficiency, utility, security and understandability from the customer’s perspective.
The AFM also points out that despite the corona crisis, providers must put customer interests first and that financial products must be the result of a balanced weighing of interests. Providers need to pay sufficient attention to the operation of the product in different scenarios in relation to the needs, characteristics and objectives of the target group. The product and the provision of information must be suitable for the target group.
Finally, the AFM emphasises the importance of product evaluation. According to the AFM, external circumstances, such as the corona crisis, may lead to product evaluation. However, also outside such circumstances it is necessary to evaluate products on regular basis, both for new and existing customers. Providers of financial products do not always have to go through all steps of the product development process again during the evaluation. For example, if it has been correctly concluded that the corona crisis has no impact on the scenario analyses performed, then it is not necessary to re-analyse the scenarios. Furthermore, the thoroughness with which the process is completed may depend on the complexity and impact of the product.