ASIC's recent report on product governance highlights the importance of ensuring that financial products are designed, distributed, and maintained in the best interests of customers.
The report provides guidance for product and business leaders on how to improve their product governance practices, with a particular focus on monitoring and reporting.
ASIC has called for investment product issuers to improve how they meet their design and distribution obligations (DDO).
The DDO requires financial products to be designed and distributed with clear consideration of consumers' needs.
An initial review by ASIC found that many product issuers were making deficient target market determinations (TMDs) with poorly defined target markets and inadequate product governance arrangements. These deficiencies put retail investors at risk of financial harm.
ASIC has issued 26 stop orders on investment products, representing $6.6 billion in funds invested by retail investors. Investment product issuers are urged to read the report, assess their practices, and address any gaps informed by the findings.
ASIC will continue to review how product issuers interact with their distributors and monitor product governance arrangements to ensure that retail investors receive suitable products.
In summary, the report suggests that product governance should involve the following key elements:
Product design
Products should be designed with the needs of customers in mind, with clear and concise features that are easy to understand.
Distribution
Products should be distributed through appropriate channels, with appropriate measures in place to ensure that customers understand the risks and benefits of the product.
Maintenance
Products should be regularly reviewed and updated to ensure that they continue to meet the needs of customers and comply with regulatory requirements.
Monitoring
Product governance should involve ongoing monitoring to ensure that products are performing as expected and that any issues are promptly identified and addressed.
Reporting
Regular reporting should be provided to senior management and governing bodies to ensure they have oversight of product performance and risks associated with the product.
For product and business leaders, here are some actionable tips that can help improve your product lifecycle governance practices:
1. Involve customers in product design
By seeking feedback from customers during the product design phase, you can ensure that the product meets their needs and is more likely to be successful.
2. Develop clear distribution channels
Ensure that products are distributed through appropriate channels and that customers understand the risks and benefits of the product.
3. Review products regularly
Regular reviews can help ensure that products continue to meet customer needs and comply with regulatory requirements.
4. Implement effective monitoring and reporting
Ongoing monitoring and reporting can help identify any issues with product performance, allowing them to be addressed promptly.
Skyjed's product governance platform can help streamline the monitoring and reporting aspects of product governance, making it easier to identify and address issues before they become bigger problems.
By using Skyjed, product, and business leaders can benefit from improved product performance, increased productivity, and greater compliance, while also avoiding any negative attention from regulators.
Here are three key features of Skyjed's product governance platform that can help product leaders save time on product governance and lifecycle management
1. Automated Risk Assessment
Skyjed's platform uses AI-driven risk assessment to automatically identify potential risks associated with a product. This saves product leaders time and effort by eliminating the need for manual risk assessments and ensures that potential risks are identified and addressed in a timely manner.
2. Customizable Checklists
Skyjed's customizable checklists allow product leaders to create and manage their own set of compliance, risk, and governance requirements for each product.
This helps product leaders save time by streamlining their product governance process and ensuring that all relevant requirements are being met.
3. Collaborative Product Reviews
Skyjed's platform allows product teams to collaborate on product reviews, ensuring that all stakeholders are involved in the process. This saves time by streamlining the review process and ensures that all feedback and suggestions are considered before finalizing the product.
By leveraging these key features, product leaders can streamline their product governance and lifecycle management processes, allowing them to focus on developing high-quality products that meet customer needs while staying compliant with regulatory requirements.
How Skyjed can help?
Having a Product Governance first approach with the right tool in organisations is proving to be more essential.
The Skyjed platform offers a comprehensive solution for product teams, providing them with the tools they need to manage their product lifecycle and their domains of product health including customers, tracking performance, and ensuring their products are aligned with their governance and growth goals.
With its intuitive interface and powerful analytics, Skyjed has made it easier than ever for product teams to stay on top of their product management, and product governance framework.
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