Improving consumer protection in the Croatian financial market

The European Commission DG REFORM supported the Croatian National Bank and the Croatian Financial Services Supervisory Agency in improving their supervisory practices in the area of conduct of business and consumer protection. To this end, the support resulted in the development of new methodologies and tools focused on the implementation of market conduct regulations in the banking, insurance, and pension sectors, with a view to strengthen consumer protection and ensure long-term stability and trust in the Croatian financial sector.

Context

In order to strengthen the implementation of the EU regulatory framework aimed at protecting financial consumers, the Croatian financial regulatory and supervisory authorities have identified the need to step-up their supervisory practices and tools. Improved conduct of business supervision shall indeed prevent negative business practices by financial institutions, ensure the provision of accurate information to customers, and avoid the application of increased costs as well as high levels of indebtedness and complaints.

Support delivered

The European Commission with the support of the Contractor assisted the Croatian National Bank and the Croatian Financial Services Supervisory Agency in enhancing their supervisory role in Croatia, by developing advanced methodologies and handbooks for conducting on-site and off-site conduct of business supervisory activities, complemented by specific tools enabling risk assessment and classification. The support provided was based on good practices identified among a selected group of EU national supervisory authorities in designing approaches that could be adapted to the supervision and enforcement of consumer protection and conduct of business. The project started in August 2022 and was finalized in March 2024.

Results achieved

The project successfully enhanced Croatian National Bank and Croatian Financial Services Supervisory Agency’s supervisory approach to consumer protection. The two-phase project involved an initial evaluation of the beneficiaries’ organisation, data, methodologies, and tools for conduct of business supervision, followed by the development of improved processes and tools to carry out on-site and off-site supervision based on selected EU good practices. These improvements will help beneficiaries identify and prevent consumer protection issues, thus adding to a more stable and reliable financial system. The project outcome includes the enhancement of supervisory practices and tools for the identification and mitigation of risks for financial institutions and a higher level of consumer protection, contributing to the growth and development of the Croatian financial sector.