Komplett Bank Annual Report 2020

Sustainable business Responsible lending – throughout the credit lifecycle Komplett Bank is committed to being a responsible lender, defined as the practice of acting in customers’ best interests, ensuring affordability, transparency of terms and conditions and supporting a borrower if they experience repayment difficulties. Responsible lending is considered a material factor for the Bank. The Board of Directors has adopted specific guidelines and procedures for the lending business, which are intended to ensure compliance with this objective. In addition, the Bank’s internal procedures and processes are aligned with applicable laws, regu- lations and other regulatory requirements. All customers must be subject to a credit assessment based on a complete set of data relevant for assessing the applicants’ financial situation. Komplett Bank does not grant loans or issue credit cards to customers who are assessed to lack sufficient debt servicing capacity. Marketing of the Bank’s products is aligned with statutory and regulatory requirements and the Code of Practice of the Association of Norwegian Finance Houses (Finansieringsselskapenes Forening) regarding the marketing of credit cards and consumer loans. Komplett Bank has put in place the following measures to ensure responsible lending practices throughout the credit lifecycle: 1. Marketing Ǵ Established internal guidelines for responsible selling practices and product labelling - Ensure messaging, channels and scope of marketing efforts are suited to attract creditworthy individuals - Ensure to avoid misleading marketing - Ensure agents adhere to Komplett Bank’s selling and product labelling practices Ǵ Goal: No well-founded complaints from customers on wrongful, lacking or unclear communication of terms and conditions - KPI: Number of cases lost in Finansklagenemda - Two cases lost in 2020 equalling 0.001 per cent of total customer engagements. Both engagements were entered into in 2016 and were related to payment insurance. The Bank has since changed its procedures related to how insurance is offered. 2. Onboarding Ǵ Established credit policy to ensure credit is provided only to creditworthy individuals Ǵ Strict onboarding process consisting of both automatic and manual evaluation of applicants’ credit worthiness - 80 per cent of applications were declined based on the Bank’s credit policies and score cards, the remaining 20 per cent got a conditional offer - Additional 40-50 per cent (depending on product and geography) manually declined when reviewing detailed info and documentation provided by the applicants Ǵ Launched refinancing product in Norway in 2020; a prerequisite for offering this solution is that it reduces the customer’s total costs related to the loan 3. Customer service Ǵ Well-established internal process mapping, routine descriptions and yearly training schedule to ensure good service towards the bank’s customers and applicants Ǵ Komplett Bank’s customer service is available through e-mail and a manned phone service. The customer service teams are followed up on KPIs based on best practices regarding response- and waiting time as well as quality measures 4. Default Ǵ Established credit policy that governs treatment of defaulted loans Ǵ Received a limited number of forbearance requests in 2020, focus on temporary assisting existing customers to overcome short-term challenges during pandemic Ǵ Norwegian customers with Flexible Loan-agreements are con- tacted on a regular basis to encourage down-payment plans and ensure customers have a plan on how to repay their loans Ǵ If a customer is in default, Komplett Bank ensures that it’s collection partners adheres to the standards of Komplett Bank and that the partners are equally or better equipped to assist the Bank’s customers in servicing their loans Anti-corruption and Money Laundering (AML) Exposure to corruption and money-laundering is considered a material risk for Komplett Bank and its license to operate. The Bank has systems in place to identify and report potential AML activity and provides frequent training of employees within AML/ terrorist financing. These activities represent Komplett Bank’s support to achieving UN SDG 16, sub-targets 16.5 and 16b. Komplett Bank has established a comprehensive framework for preventing money laundering and terrorist financing. This includes onboarding and risk assessments of new customers, review of high-risk customers and accounts, running customer and transac- tion monitoring and reporting and follow-up processes. The AML Risk Assessment and Policy are subject to yearly revisions by the Board of Directors. Work and procedures related anti-corruption and money-laun- dering has the highest priority. The COO is the bank’s AML Officer (“Hvitvaskingsansvarlig”). The Credit and AML departments are responsible for customer onboarding and KYC-processes (Know Your Customer), as well as the ongoing due diligence and continu- ous monitoring and follow-up on suspicious customer behaviour. Komplett Bank Annual Report 2020 25