As the economic impact of the Covid-19 crisis eats away at people's incomes and assets, an area which might need a relook is consumer banking practices.

Bank officers holding titles like personal financial adviser (PFA) recommend banking products to customers after assessing their finances, investing experience and risk threshold.

The information is entered into an online form, with the PFA highlighting selected terms in the form. If the customer decides to purchase the product recommended by the PFA, he signs the electronic form, with a hard copy given to him thereafter.

As such forms are copious and littered with legal jargon, it is unrealistic to expect that the customer would have read all the documents before signing them.

Yet, the customer will subsequently find that he has declared in the form that he has read and understood all the documents and that the PFA has reviewed them with him, including the fine print.

For many products, early termination would result in heavy penalties. The customer would find it difficult to plead ignorance or "undue influence", having declared that he had read the documents. Legal action would also be costly.

In an economic downturn, anxious customers who are not financially savvy might be inclined to invest in products

that a "financial adviser" of a reputable bank says will give him good returns.

The PFA would understandably be keen to sell the products in order to receive his commission or even just to keep his job. The PFA is ultimately a marketing officer of the bank.

The Monetary Authority of Singapore could perhaps impose regulations for consumer banking products that exceed a certain value or have lengthy periods of commitment to ensure that there is a 14-day "free-look" clause, such as for insurance products. This would give customers the option of cancelling without a penalty.

Alternatively, a "cooling off" period could be imposed to ensure that customers have time to read through all the documents before they can sign them.

It would also be better for these bank officers to be called relationship managers, as opposed to a title that suggests an advisory capacity.

These steps would go towards ensuring that people do not commit to unsuitable products in haste, especially during a downturn.

Agnes Sng Hwee Lee