Consultant: Development of A Toolkit on Supervision Mechanisms to Enforce Market Conduct Rules

1. Background:

The Alliance for Financial Inclusion
The Alliance for Financial Inclusion (AFI) is an innovative, member-driven organization that enables policymakers in developing countries to share their knowledge of financial inclusion policies that have delivered positive tangible results. The network currently comprises over 110 central banks, government ministries and other financial policymaking institutions from about 95 emerging markets and developing countries.

By providing members with the opportunity for peer learning and supporting technical level knowledge exchange on key aspects of financial inclusion policy, AFI works with its members to influence policy reforms, which result in expanding the reach of quality financial services to low-income populations and disadvantaged groups.

AFI Consumer Empowerment and Market Conduct Working Group
Since its launch in April 2011, the Consumer Empowerment and Market Conduct Working Group (CEMCWG) examines how consumer empowerment and protection can help to secure access to financial services and improve the quality of these services. Approaches taken by the CEMC Working Group to achieve its objectives include promoting transparency and disclosure, encouraging effective sales and marketing practices, promoting the harmonization of international initiatives, creating avenues for help and redress and financial education.

Complaint Handling by Central Banks in the AFI Network:
 61 CEMC members were assessed using data from AFI Data Portal;
 All regions were represented (SSA,ESA, EECA, MENA, Pacific and South Asia countries);
 Assessment was on availability of some form of government institutions that deal with financial consumer complaints;
 77% of countries assessed responded that they had a government institution responsible for complaint handling while 23% responded to have no system in place to handle financial consumer complaints.
Previous CEMCWG publications on Complaint Handling include:
 AFI Complaint Handling in Central Banks Framework (Link)
 AFI Market Conduct Supervision of Financial Service Providers – A Risk Based Supervision Framework – Guideline Note No.21 (Link)
 AFI Consumer Empowerment and Market Conduct: Help and Redress for Financial Consumers – Guideline Note No.9 (Link)
 AFI Consumer Protection in Mobile Financial Services – Guideline Note No.13 (Link)

Project Background
Complaint handling in Central Bank
Complaints are valuable feedback, and they can provide both direct and indirect insights into what a financial institution is doing well and what it needs to work on. Complaints can help proactively identify trends and identify broader product and line of business service issues before they become systemic problems. Actively managing complaints can help improve underlying compliance controls and customer service while avoiding the growing potential for regulatory fines or damage to an institution’s reputation.

The central bank should analyze statistics on complaints with information coming from complaints lodged with the central bank, complaints lodged with financial service providers (FSPs) through the compulsory reports, and complaints lodged with alternative dispute resolution mechanisms (e.g. ombudsman). The analysis should identify root causes and propose steps to reduce the occurrence of most typical complaints and those with largest customer impact. Additionally, the central bank should ensure that it receives data of complaints from FSPs for off-site monitoring. Complaints data should be used for planning on-site work, developing risk assessment of the FSPs, planning supervisory work and designing or updating the regulatory framework.

Next Steps
The published Compaint Handling in Central Bank Framework is aimed at providing guidance on how Central Banks can manage the responsibility of handling consumer complaints in an efficient and effective manner, without eroding the core supervisory work of CPMC. This Toolkit will provide more specific guidance to AFI members on the implementation component of the Framework. It will focus on the complaint management process and provide clear supervision mechanisms that regulators can apply to ensure market conduct rules enforcement.

2. Objective:

The objective of this consultancy assignment is to support the Complaint Handling subgroup of the CEMCWG to publish a knowledge product that will provide practical guide for AFI member countries on the implementation component of the Framework, including the complaint management process and the enforcement action. Specifically, the toolkit will:
a) Showcase AFI member countries’ experiences in supervision mechanisms to enforce market conduct rules;
b) Provide a practical guide on the implementation component of the Framework, targeting the following stakeholders: member countries, central banks and other financial sector regulators, private stakeholders, consumer organisations;
c) Provide clear supervision mechanisms that regulators can apply to ensure market conduct rules enforcement.

3. Scope of Work:

This assignment is expected to involve extensive desk research and key informant interviews. The consultant will be supported and advised by the AFI Management Unit throughout the assignment and will have access to AFI’s extensive knowledge database related to and for the purposes of this assignment. AFI will facilitate and arrange any interviews with members and partners. There is no travel associated with this assignment.

Key Activities

The appointed consultant is required to:

• Submit a metholody proposal.
• Inception meeting: preliminary consultation on the scope, expected deliverable and related timeline.
• Conduct a comprehensive review of all AFI products and services related to complaint handling in central banks, thus complementing the existing knowledge products and link/map these with member-reported evidence/case study.
• Submit the final draft version of the deliverable by 20th November 2020;
• Including the reviews and comments from the CEMCWG members, submit the final version of the deliverable by 23rd December 2020.

Additional information:
Branding and Communications
The Toolkit will be branded with the logos of AFI and Consumer Empowerment and Market Conduct Working Group (CEMCWG) on the front page of the document.

4. Consultant Experience:

The consultant undertaking this assignment should have the following qualifications:
• Advanced degree in a field related to Economics, Public Policy, International Development or another related discipline.
• Knowledge and experience in complaint handling in central banks.
• Fluency in English (oral and writing) is compulsory.
• Writing experience, must submit related working papers or research around the topic.

5. Timeline:

The consultancy work will begin end-October 2020 until 23rd December 2020 (tentatively). The final draft of the deliverable should be completed no later than 20th November 2020. Key timeline is available in the RFP doc.

6. Travel:

No Travelling is required.

7. Reporting:

The consultant will work closely with the Policy Programmes and Regional Initiatives (PPRI) Unit and with the AFI’s Consumer Empowerment and Market Conduct Unit, and other key staff. The consultant will report directly to Head of the PPRI Unit / CEMC Policy Manager.

8. Criteria for Evaluation:

The proposals submitted will be evaluated based on the following criteria:

1. Academic Qualification;

2. Experience and competence of the key staff for the assignment related;
   • Adequacy for the assignment
   • Regional/Global experience

3. Adequacy of the proposed work plan and methodology in responding to the Terms of Reference
   • Technical approach and Methodology
   • Workplan

4. Sample work – Writing experience and English