2018 REGISTRATION DOCUMENT AND ANNUAL FINANCIAL REPORT

2018 Registration document and annual fi nancial report - BNP PARIBAS 523

7 A COMMITTED BANK: INFORMATION CONCERNING THE ECONOMIC, SOCIAL,

CIVIC AND ENVIRONMENTAL RESPONSIBILITY OF BNP PARIBAS

Our economic responsibility: fi nancing the economy in an ethical manner

PROTECTING CLIENTS INTERESTS Protecting clients interests is a major concern for BNP Paribas. Therefore, the Group has chosen to place this issue at the top of its C ode of conduct and has set up a dedicated expert group within the Group Compliance t eams. Protecting clients interests is based in particular on the C ode of conduct and the Clients Interests Protection (CIP) policy which now also includes the management of client complaints.

A general, Group-wide policy

The CIP policy covers the whole life cycle of products and services (from their design to sale) and the customer relationship. Employees (in particular in Front Offi ce and Management) are continuously made aware in this area. The correct application of the policy is constantly checked by all Internal Control players: permanent control, the control functions (Compliance and Legal) and the General Inspection.

The general principles of the CIP policy are:

■ products and services that meet the customer s needs and situation;

■ clear, accurate, non-misleading information provided to the customer;

■ identifi cation and treatment of any confl ict of interest, in order not to cause any damage to the customer.

The commitments are translated into concrete practices deployed in all Group entities, depending on their specifi c characteristics:

■ The procedures for approving new products and services incorporate all the issues relating to the protection of clients interests, and provide for dedicated committees in order to ensure their compliance and their added value for the target customers;

■ The structure of the commercial teams remuneration, on which many European and local regulations have been issued in the last few years, is also subject to qualitative criteria aimed at discouraging transactions that are contrary to the customer s interests. For French Retail Banking, for example, the teams variable remuneration system is structured around four topics that express the employees expected performance: quality of the customer relationship, business development, management of risks and compliance, and management (for the relevant individuals). At BNP Paribas Fortis in Belgium, part of the variable remuneration is already indexed on responsibility criteria specifi cally linked to customer satisfaction. Within this framework, each employee has received an objective corresponding to the Bank s ambition to become one of the most recommended in the country;

■ The Group is committed to be exemplary in the protection of clients data (see BNP Paribas is committed to respecting human rights, Commitment 8). In Ukraine, Ukrsibbank is one of the rare banking establishments to have offered from 2018, the chance for customers to amend their data online, via its new site (https://online.ukrsibbank. com/ibank/) without having to go to a branch. It has attracted over 500,000 visitors since its launch. More broadly, at International Retail Banking (IRB), a data breach simulation exercise was organised in September 2018 by the RISK ORC ICT(1) , Data Protection Offi ce and

RaDAR teams, in association with Group Legal and IT, to confront the different possible scenarios (leak, alteration or loss of sensitive, protected or confi dential data) and to better prevent them;

■ Dialogue with consumer associations and other stakeholders is encouraged to gather their opinions on new ways to improve clients' interests protection;

■ Employees are made aware and trained on a large scale about clients interests. At the Group level, expert seminars for Compliance employees and others concerned by CIP are offered in all entities. Awareness campaigns such as CIP Days are conducted for the managers of entities and business lines. Moreover, the CIP Awareness online training updated in 2017 to align itself with the new CIP policy, is now available in 14 languages. It was made mandatory for all new hires within the Group via a specifi c Discovery path. Lastly, in 2018, the new MiFID II Awareness e-learning programme was deployed and had been taken by 94% of the people concerned.

Complaints management and mediation

Complaints handling reveals areas for improvement and is a way to convert dissatisfi ed customers into ambassadors, and as such, is of prime importance to the Bank. Hence its direct connection to the Clients Interests Protection policy (CIP) since October 2017.

Customer complaints statistics are reported to the Central CIP on a quarterly basis (new complaints received during the period) and annually (new complaints received for which the subject described by the customer may lead us to consider a risk of non-compliance with the standards applicable to the entity). The management of complaints by the entities is also subject to specifi c monitoring with a dedicated control point .

Most of the Group s business lines have one or more services (internet, telephone, email, etc.) enabling clients to give feedback or make a complaint seven days a week, 24 hours a day. These reactions are taken into account in the development of new products or the improvement of customer relations.

■ In Italy, thanks to a process of continuous improvement, the percentage of customer complaints processed within the specifi ed time limit reached 98% in 2018 (vs. 81% in 2017 and 69% in 2016). BNL banca commerciale (bc) also set itself the target of reducing the number of complaints received, via the analysis of their sources and the defi nition of corrective action plans.

■ In Belgium, the backload of complaints decreased by 40% in 2018, while the number of new fi les processed within the time limits increased by 10%. This progress was the result of the implementation of best practices, in particular through a better collaboration between the teams responsible for quality and complaint management.

■ In France, there is a specifi c business line for processing customer complaints. The complaint processing system was strengthened by the establishment of a team and a governance dedicated to the early identifi cation and resolution of the sources of customer dissatisfaction.

(1) ORC ICT: Operational Risk and Control, Information and Communication Technology.