Ethical product design and sales practices in the UAE financial sector

 

Strengthening market conduct through responsible product governance

In the third part of our series, we explore the importance of a robust product design and development framework, and how Licensed Financial Institutions (LFIs) manage conduct risk within that process. A robust product design framework should enhance governance and oversight, while enabling LFIs to offer products and services that build trust with both existing and prospective customers — without compromising commercial viability.

The Central Bank of the UAE (CBUAE) has taken a proactive approach to improving consumer protection regulations and standards. These efforts aim to foster ethical market conduct and prevent mis-selling or misleading advertising, which can result in unfair treatment of consumers.

By embedding conduct risk management into product design, development, distribution, marketing and sales strategies, including the use of third parties for such activities, LFIs can strengthen risk mitigation and improve consumer outcomes. This contributes to the overall stability and integrity of the UAE financial sector.

 

Key factors LFIs must consider during product design, development and sales practices 

  • Strong governance: Establish oversight structures that incorporate ethical considerations that are key to product development, promotion, and sales practices. These should align with regulatory obligations and internal policies.
  • Responsible lending and financing: Assess consumer affordability and suitability before offering products or facilities. Evaluate the customer’s ability to service credit to prevent over-indebtedness.
  • Clear disclosure: Provide accurate, clear and easy-to-understand information in Arabic and English. This includes product terms, features, cost breakdowns, and disclosures to support informed consumer decisions.
  • Consumer education: Promote financial literacy through awareness programmes that help consumers understand the benefits, risks, and obligations of the products and services offered by LFIs.

 

For more details, download the publication below.

Download the PDF to learn more

Download the PDF to learn more

We hope you find this update useful. Please feel free to reach out to the team directly should you have any questions.

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