News 03/12/24

Guideline on ‘Scenario analyses from a customer perspective’ for the PARP standard

Following a period of consultation with the sector, the guideline on 'Scenario analyses from a customer perspective' has now been finalised. With the implementation of this guideline, we provide a framework for developers and co-developers of financial products to perform scenario analyses. These analyses are part of the Product Approval and Review Process (PARP) and aim to ensure that consumers are offered financial products that are tailored to their goals and situation. This aids in protecting consumers.

In short

Scenario analyses strengthen product development
Strong support for the guideline
Reference points for various product groups

Scenario analyses strengthen product development

A scenario analysis is a powerful tool for determining how the product, target market or distribution method should be designed, or modified where necessary. These analyses are part of the Product Approval and Review Process (PARP) and aim to ensure that consumers are offered financial products that are tailored to their goals and situation. The analyses provide insight into the functioning of products in various scenarios. Based on the outcomes, companies can adjust their products, target group and/or distribution strategy.

The AFM expects that the reference points from this guideline will further enable companies to conduct high-quality scenario analyses. Well-matched products will, on the one hand, contribute to better consumer protection and on the other hand will generate greater trust in the financial sector.

Strong support for the guideline

The final guideline follows consultation with the sector, and it is encouraging to see that it enjoys wide-spread support. We received valuable input from the sector, including clarifications on the distributor’s role and the separate identification of sustainability scenarios. We would like to thank everyone for their input. In the feedback statement we explain how we have incorporated the input from the responding parties.

Reference points for various product groups

The new guideline includes reference points for developers and co-developers of financial products in relation to the product development process. The guideline is applicable to developers of all kinds of products that are covered by the PARP standard. It contains a sample of scenario analyses for various product groups. Please note that the guideline does not provide an exhaustive overview of all the requirements applicable to scenario analyses.