New recommendation issued by the National Bank of Hungary on handling complaints

Author: dr. Veronika Papp

The National Bank of Hungary ("MNB") has recently published a new Recommendation on its expectations and what it considers to be good practice in the complaints handling of financial organizations ("Recommendation"). The Recommendation replaces the former recommendation issued in 2015. Hereunder we briefly summarize the most important updates of the Recommendation.

When does the Recommendation apply?

The Recommendation shall apply from 1 February 2022.

To whom does the Recommendation addressed?

The Recommendation is addressed to financial organizations supervised by the MNB. Such financial organizations include particularly the investment firms, credit institutions and other financial institutions, independent financial intermediaries, investment fund managers, insurance companies, independent insurance intermediaries and multiple insurance agents, payment institutions, voluntary mutual funds and private pension funds, and occupational pension funds.

What changes will the Recommendation bring?

The Recommendation introduces additional requirements on several important issues but introduces some minor favorable changes as well.

The Recommendation expects financial organizations to

  • inform the senior management at least on a quarterly basis of reoccurring or systemic problems and potential legal and operational risks, to facilitate the resolve of the causes of complaints,
  • provide employers dealing with complaints appropriate training and regular refresher courses,
  • actively monitor complaints about intermediaries and take preventive and corrective actions as necessary to protect the interests of clients.

A technical simplification compared to the previous version is that the complaints handling policy can be written in font size 10 instead of 11.

Given the growing importance of digital information and communication, the MNB expects the complaints handling policies published on website shall have keyword search function. It is a good practice for a financial organization to include a platform on its website for the submission of complaints. The MNB also recommends making its Financial Navigator's Booklet available on the financial organization’s website, with a hyperlink to the MNB's website.

The MNB, in addition to the usual complaint channels, supports the use of alternative digital channel for complaints submission if it does not harm the interests of clients. The complaints handling policy should be displayed in a prominent and attention-grabbing manner in the customer reception area, so that it is accessible close to the entrance or information desk without any assistance from the financial organization’s employers. The MNB also suggests having its Financial Navigator's Booklet available in the office for customer services.

The Recommendation sets out additional requirements for responding to complaints. For example, if a complaint is made electronically, the financial organization’s system should send a respond about the receipt of this complaint and inform the client of the identification details and if the reply will be sent by post. If delivery of the postal reply to a complaint is unsuccessful, the MNB recommends making another attempt to deliver the reply. The MNB expects from financial organizations carrying out cross-border activities in Hungary to handle Hungarian complaints and respond to them in Hungarian.

Is it mandatory to comply with the expectations of the Recommendation?

The Recommendation is a non-binding regulatory instrument for financial organizations supervised by the MNB. However, the MNB monitors and assesses compliance with the Recommendation during its control and monitoring activities.

If the financial organization complies with the Recommendation, it is entitled to indicate this in its policies.

Where can I find out more about the Recommendation?

Recommendation No 16/2021 (XI.25.) of the National Bank of Hungary on complaints handling by financial organizations is available on the MNB's website in Hungarian.