This report from FinCoNet’s Standing Committee 5 presents findings on regulatory and supervisory approaches to financial advertising. The report is based on responses collected from 20 participating jurisdictions and provides analysis on how supervisors oversee financial advertising in their respective jurisdictions. The report also explores challenges, trends, emerging issues and innovations through the analysis of results and the use of case studies and examples. According to the survey results, all jurisdictions have some form of legal and regulatory framework related to financial advertisements. Such legislation, rules or guidance generally pertain to the presentation of financial advertisements to ensure they are clear and easy to understand for consumers, and that all relevant information is adequately disclosed, such as fees, interest rates and term length.
The report finds that financial advertising practices vary greatly across the financial industry. The supervisory approaches, tools, and sanctioning methods used by supervisory authorities in each jurisdiction vary, although there are notable common approaches. Most jurisdictions identified direct/proactive monitoring by the supervisory authority and monitoring consumer complaints related to financial advertising. Many jurisdictions also use a range of enforcement tools such as warning letters, infringement notices, public warning notices, educational letters or other methods as part of their supervisory approaches.
The report also finds that most jurisdictions have implemented general, technology-neutral financial advertising legislation that covers all channels equally. However, these approaches may not be best suited to address innovations in financial advertising practices. Most jurisdictions agree that the growing volume of advertising campaigns and the variety of distribution channels, such as social media and electronic advertising, require additional resources for competent authorities. To keep pace with the rapid development and digitalization of financial advertising practices, tools and frameworks may need to be updated or rethought.
The report concludes that jurisdictions should invest in tools and continued research to improve oversight for financial advertising. Authorities should also consider how they may deploy new supervisory technology to complement traditional tools in an age of rapid digitalisation of financial services. The challenges and best practices related to financial advertisements are shared across many different jurisdictions, making learning through international collaboration especially valuable.
