Internal Controls in Financial Services
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Questions and Answers

What type of document must Financial Service Providers provide to financial consumers?

  • Customer feedback forms
  • Verbal agreements
  • Key Fact Documents (correct)
  • Internal memos

    • Which of the following must be included in the Key Facts Document for loan products?

  • Employee opinions
  • Key features of the product (correct)
  • Projected future earnings
  • Company history

    • How must Financial Service Providers convey information to financial consumers?

  • Through opaque and complex language
  • Using only printed materials
  • Only through phone calls
  • In a clear and transparent manner (correct)

    • What is required before accepting an offer from a Financial Service Provider?

    <p>A written confirmation from the financial consumer</p> Signup and view all the answers

    What must Financial Service Providers do before amending their range of services?

    <p>Notify affected financial consumers at least 30 days in advance</p> Signup and view all the answers

    Which languages must Key Facts Documents be available in?

    <p>English, Sinhala, and Tamil</p> Signup and view all the answers

    What should be high in prominence in digital channels according to the Financial Service Provider's requirements?

    <p>Key information</p> Signup and view all the answers

    What actions must a financial service provider take to improve accessibility for ATMs and automated equipment?

    <p>Enable screen reader features</p> Signup and view all the answers

    In a digital transaction process, which information must be disclosed before completion?

    <p>Pricing and key terms and conditions</p> Signup and view all the answers

    How should the signature verification process treat a thumbprint?

    <p>As the same as a conventional signature</p> Signup and view all the answers

    Which of the following is NOT a requirement for web accessibility?

    <p>Full navigability using only a mouse</p> Signup and view all the answers

    What must mobile applications ensure for accessibility?

    <p>Font and background color adjustability</p> Signup and view all the answers

    What does the financial service provider need to do regarding document accessibility?

    <p>Offer documents in accessible formats upon request</p> Signup and view all the answers

    What is included in the definition of 'Financial Service Provider'?

    <p>Any financial institution approved by the Monetary Board</p> Signup and view all the answers

    What role does an authorized person have according to the accessibility requirements?

    <p>They can provide assistance as permitted by a letter of authority.</p> Signup and view all the answers

    Who falls under the category of 'Key Management Personnel'?

    <p>Executive directors and those with authority over planning and controlling activities</p> Signup and view all the answers

    What does 'Tying of Products or Services' refer to?

    <p>Bundling two or more financial products together without distinction</p> Signup and view all the answers

    What is the main purpose of having effective internal controls in a financial service provider?

    <p>To ensure compliance with financial consumer protection policies</p> Signup and view all the answers

    Which feature is essential for web contents to comply with accessibility standards?

    <p>Content must be perceivable, operable, understandable, and robust.</p> Signup and view all the answers

    Which of the following is NOT a component that the Financial Service Provider must include in its financial consumer protection policies?

    <p>Strategies for increasing sales</p> Signup and view all the answers

    How should security features be presented to ensure accessibility?

    <p>In both text and audio options</p> Signup and view all the answers

    What defines 'Personal Information' in the context provided?

    <p>Any information about identified or reasonably identifiable financial consumers</p> Signup and view all the answers

    Who are considered 'Operational Management Personnel'?

    <p>Officers who engage in daily decision-making, like branch managers</p> Signup and view all the answers

    What should a Financial Service Provider include in its complaint handling procedure?

    <p>Processes for resolving consumer disputes</p> Signup and view all the answers

    Which of the following activities is essential for monitoring compliance with financial consumer protection policies?

    <p>Periodic auditing of the internal control systems</p> Signup and view all the answers

    What is primarily involved in the evaluation of financial products and services related to consumer protection?

    <p>Identifying and controlling risks</p> Signup and view all the answers

    What role does data security and privacy play in financial consumer protection policies?

    <p>Protects consumer assets and information</p> Signup and view all the answers

    What should be included in the mechanisms for controlling financial consumer protection issues?

    <p>Processes for identifying and reporting issues</p> Signup and view all the answers

    Why is it important for a Financial Service Provider to share critical information about financial consumers?

    <p>To ensure compliance and transparency</p> Signup and view all the answers

    What does 'accessible format' refer to?

    <p>Electronic/word format with Unicode fonts</p> Signup and view all the answers

    What is meant by 'complaint' in the context of financial services?

    <p>Dissatisfaction regarding a financial service or product</p> Signup and view all the answers

    Which of the following best defines 'assistive technology and equipment'?

    <p>Products that enhance the capabilities of persons with disabilities</p> Signup and view all the answers

    What is the role of 'Financial Consumer Protection'?

    <p>To ensure fairness and safeguard consumer rights in financial services</p> Signup and view all the answers

    What is a 'Credit Facility'?

    <p>An arrangement to borrow money for various purposes</p> Signup and view all the answers

    How is 'bundling of product' best described?

    <p>Selling multiple financial products as a single package</p> Signup and view all the answers

    Which entity is referred to as the 'Central Bank'?

    <p>Central Bank of Sri Lanka</p> Signup and view all the answers

    Which of the following is NOT considered a 'Financial Consumer'?

    <p>A financial service provider promoting a product</p> Signup and view all the answers

    Study Notes

    Internal Controls

    • Financial Service Providers must implement effective internal controls to adhere to consumer protection policies and comply with regulations.
    • Proper mechanisms are required for identifying, recording, monitoring, and controlling issues related to financial consumer protection.
    • Requirement for a complaint handling procedure that meets regulatory standards.

    Policies and Procedures

    • Financial Service Providers must have comprehensive consumer protection policies outlining employee roles across all levels.
    • Risk management practices should include identification, measurement, and control of compliance risks related to consumer protection.
    • Critical financial consumer information must be shared within the organization and with external parties.
    • Key information must be disclosed, including complaint resolution procedures and product evaluations.
    • Emphasis on data security, privacy, and safeguarding consumer assets against fraud or misuse.
    • Periodic audits should assess the adequacy of consumer protection frameworks.

    Accessibility Improvements

    • Financial Service Providers must enhance ATM and automated equipment accessibility, including screen reader compatibility.
    • Provision of debit and credit cards with accessibility features at consumer requests.

    Signature Verification

    • Signatures of financial consumers, including electronic ones, must be clear and suitable for verification.
    • Thumbprints are equivalent to conventional signatures for verification purposes.

    Web Accessibility

    • Web content must be perceivable, operable, and understandable to all users.
    • Accessibility features include adjustable font sizes, navigability using keyboards, and screen reader compatibility.
    • All web elements should be labeled correctly or use alternative text for clarity.
    • Security features must be available in both text and audio formats.

    Mobile Application Accessibility

    • Mobile applications should allow for adjustable font sizes and colors to support user accessibility.
    • Full navigability and screen reader compatibility are essential.
    • Security and safety features must be adequately represented in both text and audio formats.

    Information Accessibility

    • Financial Service Providers must provide necessary documents in accessible formats upon request.
    • Consumers may authorize someone to assist them via proper documents.
    • Essential documents must be provided in writing, including electronic formats.
    • Clarifications should be available for consumers with queries about the information provided.
    • Written confirmation is needed from consumers acknowledging receipt and understanding of information before transactions.
    • Consumers must be notified 30 days in advance of service changes.

    Key Facts Document

    • A "Key Facts Document" must be created for products and services, available in Sinhala, Tamil, and English.
    • It should clearly outline key features such as product nature, interest rates, penalties, fees, and commissions.

    Definitions and Terms

    • Accessible format refers to documents provided in formats that accommodate disabilities.
    • Accessibility means ensuring fair access to financial services.
    • Assistive Technology encompasses tools that boost the functional capabilities of individuals with disabilities.
    • Complaint denotes dissatisfaction expressed by consumers regarding services or products.
    • Financial Consumer includes individuals or entities utilizing financial services, excluding service providers themselves.
    • Financial Consumer Protection refers to regulatory frameworks safeguarding consumer rights in financial contexts.
    • Financial Service Provider includes various licensed financial institutions such as banks, finance companies, and money brokers.

    Regulatory Framework Authority

    • Central Bank refers to the regulatory authority governing financial institutions under the Monetary Law Act.

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    Description

    This quiz covers the principles of effective internal controls within financial service providers. It explores how these controls support compliance with consumer protection policies and overall business strategy, focusing on risk profiles and mechanisms. Test your understanding of the implementation of these controls and their significance in the financial industry.

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