A diverse range of financial services is on offer
In the financial markets, customers can select options most suitable to their needs from the large number of service providers and the wide spectrum of services on offer. From the customer’s point of view, however, the provision of a diverse range of different services may be confusing because no clear borders between lines of business always exist – for example, a bank branch may offer insurance services and a service point of an insurance company may handle investment-related matters.
The provision of financial services is a rigorously regulated area, meaning that both those authorised to provide services and the procedures to be complied with are strictly provided for in the relevant legislation. To ensure consistency in procedures, many sectors have also issued their own rules and policies to be observed in the provision of services to customers.
These pages provide an overview of the most frequently provided services in the financial sector, such as banking and financing services, investment services, payment services and insurance brokerage. Sometimes it may be difficult to differentiate between a service and a product. If you do not find here what you searched for, it is also worth examining the site Financial products. Information on loans and deposits, for example, is available on both sites.
Comparison of services is worthwhile
When you are making a choice between different services, it is sensible to compare the contents of the services provided by various service providers and the costs and expenses charged. When comparing costs and expenses, check that the information is provided in a comparable manner. If necessary, do not hesitate to ask for further information on the contents and prices of the service offered.
When you compare insurance offers, examine carefully the indemnity clauses of different insurance companies before you sign an insurance contract.
Contractual terms and conditions are important
When agreement is reached on the provision of a service, it often requires the conclusion of a written contract. Before you sign a contract, always read the terms and conditions of the contract. When you are entering into a contract, also ascertain whether the contract can be terminated and on what grounds.
The contract can often be terminated in a manner defined within the terms and conditions of the contract itself. The termination of a contract becomes valid after a period of notice. In some cases, the customer may be required to pay the costs arising from the termination to the service provider. On the other hand, certain contracts, such as agreements on long-term saving where the funds cannot be withdrawn before retirement, are tied and can be terminated only in situations provided for in law.
Information to be supplied to service providers
It is in the customer’s own interest to give adequate information on himself and his financial situation to the service provider. This enables the service provider to submit the essential information on the services, products and related risks to the customer.
In providing investment services, for example, the service provider is required under law to obtain information on the customer’s investment objectives, financial situation and investment knowledge and experience, in order to be able to recommend products or transactions suitable for the customer. Similarly, insurance companies need information on their customers’ requirements for insurance protection in order to be able to offer the appropriate coverage, and banks need information on customers’ financial situation when extending credit.
Provision of services requires authorisation
Provision of financial services normally requires authorisation from an authority that supervises financial markets, in Finland from the Financial Supervisory Authority (FIN-FSA).
In the European Economic Area (EEA), services may also be provided in another EEA member state on the basis of authorisation granted in the home member state. In such a case, the operations are mainly supervised by the supervisory authority of the service provider’s home member state. Marketing conducted in Finland, contractual terms and conditions and procedures with respect to the customer relationship are also supervised by the authority of the host member state, in Finland FIN-FSA.
If you intend to purchase services from an unknown service provider, always make sure that the service provider has valid authorisation.
20 September 2012