Glossary

Term

Definition

Account information services

An online service to provide consolidated information on one or more payment accounts held by the payment service user with one or more payment service providers.

Agent fraud

Deceptive acts carried out by agents of a financial services provider against their customers.

Alternative dispute resolution mechanism

A generic term used to describe a range of procedures (including public ombudsmen or ombudsmen financed by relevant industry associations) designed to provide a way of resolving a dispute with a financial service provider (including their agents and outsourced parties) as an alternative to formal court procedures, and in addition to providers’ internal complaints-handling mechanisms.

Buy Now Pay Later (BNPL)

A financial service, usually offered during the checkout process, that allows a customer to receive a good or service immediately but fully defer the payment for a certain amount of time or pay for it in instalments. The customer often, though not always, does not pay additional fees or interest charges if the instalments are repaid on time and in full. Generally, it involves a tri-partite transaction among the consumer, the merchant, and the BNPL provider.

Consumer complaints

Statements that express dissatisfaction or suspect misconduct by the provider of a financial product or service, including their agents and outsourced parties. Consumers may submit such statements directly to the provider, to a regulatory or supervisory authority, or to an external or alternative dispute resolution scheme.

Decumulation

The process of converting pensions or retirement savings into retirement income.

Digital wallet

Procedures agreed between the provider and the consumer to initiate payments from linked payment cards or accounts, which can be accessed through devices connected to the internet or through mobile communication systems. It can be incorporated in tools made available to the consumer by their financial institution or offered by a third party.

E-money

A monetary value stored electronically, including magnetically, represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions, and which is accepted by a natural or legal person other than the electronic money issuer.

Financial scams and frauds

Deceptive acts or operations aiming to gain a dishonest advantage financially.

Gadget insurance

Policies that protect consumers’ mobile phones or other electronic items against accident loss, damage or theft.

Innovation hub

Usually provides a specific scheme, via which firms can engage with the supervisor to raise questions and seek clarifications or non-binding guidance about FinTech related issues in the context of compliance with the regulatory framework, licencing or registration requirements, and regulatory and supervisory expectations.

Internal fraud

Deceptive acts or operations carried out by employees within a financial services provider.

Mobile banking

A service allowing customers to access their financial accounts, carry out transactions and manage their finances from their mobile devices.

Payday lending

Short-term, low-value, high-cost loans to cover immediate cash needs typically repayable on borrower’s next payday or when income is received and usually granted without an assessment of the borrower’s creditworthiness.

Price walking

A form of price discrimination, often in insurance markets, in which new customers are offered preferential rates while long-time customers see their premiums rise repeatedly due to factors that are not linked to the risk-profile of the customer and the cost of service.

Product governance

The systems, procedures and controls in place in financial services firms to design, approve, market and assess financial products through their life cycle to ensure that they meet consumers’ interests and objectives and the relevant regulatory requirements.

Push payments

A payment transaction initiated by the payer or sending customer. In the context of PSD2, also known as “credit transfers”.

Regulatory sandbox

Provides a special scheme, in which companies can test innovative financial products, services, or business models with actual customers in a controlled environment (a ‘sandbox’) pursuant to a specific testing plan agreed with the supervisor and subject to the application of distinct safeguards.

Salary advance/earned wage access

A service, often offered by an employer in partnership with a third-party provider, that allows “early access” to a certain portion of an employee’s wages before payday. Such services also exist under a “direct-to-consumer” form, in which providers gain access to a consumer’s banking data and allow the consumer to request an advance on upcoming salary payments.

SIM swapping

A type of fraud that allows the perpetrator to gain access to the victim’s phone number, which can then be used as part of two-factor authentications to access bank or other financial accounts. The scammer generally contacts the victim’s mobile phone carrier and convinces them to activate a SIM card in the scammer’s possession.

Super apps

Super apps provide end users with a one-stop shop for a variety of services (messaging, e-commerce, ride hailing, lodging – as well as payment and other financial services) and are typically offered by big tech companies, i.e. large companies with an established technology platform.

Supervisory letter

Official correspondence from a supervisory authority to a regulated firm. It can serve an educational purpose, i.e. to inform about the applicability of relevant legislation, rules, or guidelines and how they should be interpreted or applied in a specific situation. It may also serve as a warning, i.e. notifying a firm that they have violated a relevant rule under the supervisory authority’s purview and that failure to remedy the violation may lead to enforcement action.

Supervisory statement

Guidelines issued by supervisory authorities setting flexible frameworks for firms, incorporating new and existing expectations.

Transaction account

An account at a bank or other financial institution that can be used to receive transfers, make withdrawals or initiate payments.

Unit-linked insurance

A type of investment, often offered by a life insurance company, in which the payments are linked to individual shares within a fund.

Warning/notice

A notice issued by a supervisory authority indicating its intention or consideration of taking further action against a regulated/supervised entity or individual.