Financial Product Development and Governance Audit Checklist

A comprehensive checklist for auditing financial product development and governance processes, covering aspects such as product design, risk assessment, regulatory compliance, customer suitability, and performance monitoring to ensure responsible and effective product management.

Financial Product Development and Governance Audit Checklist
by: audit-now
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About This Checklist

In the rapidly evolving financial services landscape, effective product development and governance are crucial for innovation, compliance, and customer satisfaction. This Financial Product Development and Governance Audit Checklist is an indispensable tool for ensuring that new financial products are developed, launched, and managed responsibly. By systematically evaluating product design processes, risk assessments, regulatory compliance, customer suitability, and ongoing performance monitoring, this checklist helps financial institutions identify potential issues, enhance product quality, and mitigate risks associated with new offerings. Regular implementation of this checklist not only safeguards against regulatory scrutiny but also contributes to sustainable growth and customer trust in an increasingly competitive financial marketplace.

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Industry

Financial Services

Standard

MiFID II - Markets in Financial Instruments Directive

Workspaces

Bank branches

Occupations

Product Manager
Compliance Officer
Risk Management Specialist
Internal Auditor
Customer Experience Analyst

1
Is the financial product compliant with MiFID II Product Governance requirements?

Select the compliance status of the product.

To ensure adherence to regulatory standards.
2
What is the customer suitability score for the financial product?

Provide a score from 1 to 10, where 10 indicates high suitability.

To assess the alignment of the product with customer needs.
Min: 1
Target: 7
Max: 10
3
Is there adequate documentation for the product development process?

Provide details of the documentation available.

To verify that proper records are maintained for governance.
4
What is the risk level associated with this financial product?

Select the risk level based on your assessment.

To evaluate the risk management practices in place.

5
When was the last performance review conducted for this product?

Provide the date of the last performance review.

To ensure regular monitoring of product performance.
6
What were the key findings from the last performance review?

Provide detailed findings from the review.

To document insights and areas for improvement.
7
What is the current status of the action plan derived from the last review?

Select the status of the action plan.

To track the implementation of recommendations.
8
What percentage of performance improvement has been observed since the last review?

Provide the percentage of improvement.

To quantify the effectiveness of implemented changes.
Min: 0
Target: 10
Max: 100

9
What innovative features does the financial product offer?

Provide a description of the innovative features.

To assess the uniqueness and competitiveness of the product.
10
How would you rate customer feedback on the innovative features?

Select the customer feedback rating.

To gauge customer satisfaction and acceptance of innovations.
11
What is the total investment made in product innovation?

Provide the investment amount in currency.

To evaluate the financial commitment to innovation efforts.
Min: 0
Target: 500000
Max: 10000000
12
When was the last update made to the innovation strategy?

Provide the date of the last strategy update.

To ensure the strategy remains current and relevant.

13
Is there documentation for each stage of the product lifecycle?

Provide details on the lifecycle stages and their documentation.

To ensure that all phases of the product lifecycle are well documented.
14
What is the current status of the product in its lifecycle?

Select the current lifecycle stage of the product.

To assess where the product stands in its lifecycle.
15
What is the average duration of the product lifecycle in months?

Provide the average duration in months.

To understand the typical lifespan of products and manage expectations.
Min: 1
Target: 24
Max: 120
16
What challenges have been faced during the product lifecycle?

Provide a detailed description of challenges encountered.

To identify potential areas of concern for future products.

17
What methodology is used for assessing the risks associated with the financial product?

Select the risk assessment methodology utilized.

To ensure that a systematic approach is taken in risk assessment.
18
How many risks have been identified for this financial product?

Provide the total number of identified risks.

To quantify the number of risks that need to be monitored.
Min: 0
Target: 5
Max: 100
19
When was the last risk assessment conducted for this product?

Provide the date of the last risk assessment.

To ensure that risk assessments are done regularly and timely.
20
What mitigation strategies are in place for the identified risks?

Provide a detailed description of the mitigation strategies.

To evaluate how effectively risks are being managed.

FAQs

These audits should be conducted at key stages of the product lifecycle, including pre-launch, post-launch review (typically 6-12 months after introduction), and periodically thereafter, usually annually.

Key areas include product design and approval processes, risk assessments, regulatory compliance checks, customer suitability analysis, pricing strategies, marketing and disclosure practices, and ongoing performance monitoring mechanisms.

These audits are typically conducted by a cross-functional team including product managers, compliance officers, risk management specialists, and internal auditors, sometimes with input from external consultants for specialized products.

The checklist includes items that assess the alignment of product features with target customer needs, the clarity of product disclosures, and the effectiveness of customer suitability assessments, helping to ensure products are appropriate for their intended audience.

Yes, the checklist can be customized to address specific requirements of various financial products, such as investment funds, insurance policies, or lending products, while maintaining core governance and development audit elements.

Benefits

Ensures compliance with product governance regulations and internal policies

Identifies potential risks and issues in product design and implementation

Enhances product suitability and alignment with target customer needs

Improves transparency and fairness in product features and pricing

Strengthens overall product lifecycle management and performance monitoring