On 9 December 2021, the European Banking Authority (EBA) published a report on the application of its guidelines on the remuneration of sales staff in force since 2016. The EBA has found that financial institutions focus more on prudential requirements and commercial interests than on meeting the interests of consumers. The EBA also found that the application of the guidelines varies significantly depending on the number of relevant staff in, and on the type of, the institution. However, the EBA has also identified good practices that are considered to be compliant with the guidelines.

In summary the good practices identified include:

• Involve the HR function in the design of the policies supported by the compliance and/or risk management function/internal control function, which should critically assess the policy.
• Ensure the independence of the risk management and compliance/internal control function, also vis-à-vis the management body itself.
• Have an integrated remuneration policy for all staff, covering all regulatory requirements.
• Carry out an internal assessment about the appropriate balance of variable remuneration (VR) to fixed remuneration (FR) depending on the products that the sales staff are predominantly selling and the type of customer for whom these products are intended.
• When developing KPIs that determine the variable remuneration of sales staff, include in the formula measurements of customer satisfaction or, conversely, customer detriment.
• Apply dedicated tools in order to monitor conflict of interest and residual risk from remuneration policies and practices, such as mystery shopping by the institutions themselves, targeted reviews of sales staffs’ compliance, additional training for sales staff and whistleblowing.