GE BaFin Banking Product Monitoring

On Oct. 30, GE BaFin issued circular on banking customer products.

  • GE BaFin issued a new Circular 08/2023 entitled Monitoring and governance of banking products in private customer business, on introduction of regulations for monitoring.
  • Legal Basis
  • Circular incorporates the guidelines of the EBA for the supervision and governance of banking products in retail banking, as specified in EBA/GL/2015/18, of Jul. 15, 2015.
  • The Circular provides a framework for monitoring and monitoring on the basis of both Section 25a Paragraph 1 of the Banking Act (KWG) and Section 27 Paragraph 1 of the Act on the Supervision of Payment Services (ZAG), relating to product governance.
  • It relates to banking products, payment services and E-money products in the private customer business of CRR credit institutions according to KWG, and firms under ZAG.
  • Circular Overview
  • The subject of the Circular is the introduction of regulations for the monitoring and governance of banking products, payment services and e-money products as an essential element of general organizational requirement for internal control systems.
  • The terms of the Circular are aimed at both product manufacturers and developers.
  • The regulations relate to internal processes, functions and strategies for conception, market launch and the verification of all of these products throughout their life cycle.
  • The Circular describes the relevant procedures which are intended to ensure that all of the interests, goals and the objectives characteristics of the target market are met.
  • The suitability of products for individual consumers is not the subject of this Circular.
  • A product distributor is classed as firm that provides any of the products to consumers.
  • This also includes divisions of any product manufacturers that are not involved in the design of the products involved, but are responsible for all the subsequent marketing.
  • Products Covered
  • The range of products covered by the Circular includes mortgages, general consumer loans, deposits as defined in Deposit Insurance Act (EinSiG), Building Society savings, payment accounts and services, payment instruments, and other means of payment.
  • Outsourcing
  • Where activity of product manufacturing and/or product distribution is completely or partially outsourced to third parties or carried out by another entity in some other way, the manufacturers and distributors must ensure they meet AT 9 MaRisk requirements.
  • The responsibility for appropriate risk management in connection with outsourcing or outsourced activities, lies with upper management of firms carrying out outsourcing.
  • Effectiveness
  • The requirements of the new Circular will now all come into force as from May 1, 2024.

Regulators GE BaFin
Entity Types Bank; BS; CNSM; MSB
Reference Cir 08/2023, PR 10/30/2023; EBA/GL/2015/18; KWG, ZAG, EinSiG; MaRisk; ESG
Functions Advertising; Audit; Compliance; C-Suite; Financial; Legal; Operations; Outsourcing; Product Administration; Product Design; Reporting; Risk; Sales Practices; Technology; Treasury
Countries Germany
Products Banking; Deposits; Loan; Mortgage; Payments
Regions EMEA
Rule Type Final
Rule Date 10/30/2023
Effective Date 5/1/2024
Rule Id 189837
Linked to N/A
Reg. Last Update 10/30/2023
Report Section EU

Last substantive update on 11/02/2023