EBA publishes new set of indicators to identify potential causes of consumer harm

The European Banking Authority (EBA) has published a new set of 11 indicators designed to identify detriment to consumers that may arise as a result of the misconduct of financial institutions offering retail banking products in the EU. The indicators cover mortgage credit, consumer credit, deposits, payment accounts, and payment services and provide information to help the EBA and national competent authorities prioritize their regulatory and supervisory work in consumer protection. The EBA has mandated that these retail risk indicators (RRIs) should be used to measure the retail risks faced by consumers, or the potential harm suffered by consumers in the context of their business relationship with product and service providers.
The EBA developed these retail risk indicators in accordance with its mandate under Article 9(1) of Regulation (EU) No 1093/2010. The EBA regulation was amended in 2019, extending the mandate of the EBA in relation to consumer protection. The EBA has now developed a number of additional tasks, including developing retail risk indicators for the timely identification of potential causes of consumer harm.
The EBA has also released a methodological note (to be founds in the report on page 16) that complements the publication of these indicators, helping readers to interpret the results. The note outlines important caveats that need to be taken into account when analyzing the data. The indicators will show emerging trends over time as more data becomes available and quality continues to improve.
While the publication of these indicators is a positive step towards increasing consumer protection, the EBA has also acknowledged that the data used to calculate the indicators has a number of limitations. For instance, some indicators do not cover all EU and other EEA countries, and some indicators are calculated based on data collected by the EBA primarily for prudential supervision, not consumer protection requirements. As such, they should be understood as mere proxies for potential consumer detriment, not precise metrics. Finally, many of these indicators are being published for the first time, and any potential trends will only emerge in the coming years.
Despite these limitations, the publication of these indicators represents a significant step forward in the EBA’s efforts to protect consumers from harm caused by financial institutions. The EBA plans to update and refine these indicators on an annual basis and publish them as part of the EBA’s annual Risk Assessment Report.