1. Client Protection Assessments: A Short Presentation
This short presentation can be added to any type of client protection training. It introduces the importance of the Smart Campaign’s Client Protection Assessments.
To prepare to present this presentation, please see the Smart Campaign’s webpages on assessments and certification:

2. Questions this presentation will answer:
What is a Client Protection Assessment?
What are the benefits to your institution?
Which type of assessment is best for your institution?
How does your institution get started?
How does an assessment compliment other SPM assessments?
How can my institution build on the assessment?
This presentation will address 6 frequently asked questions about Client Protection Assessments.

3. What is a Client Protection Assessment?
A confidential diagnostic tool that thoroughly examines a financial institution’s (FI) implementation of the seven Client Protection Principles.
A process of internal review to identify the FI’s strengths, weaknesses/risks, and ultimately opportunities to enhance its client protection practices.
Identify strengths
Identify weaknesses/risks
Identify opportunities to improve practice
What is a Client Protection Assessment?
A confidential diagnostic tool that thoroughly examines a financial institution’s (FI) implementation of the seven Client Protection Principles. The Client Protection Principles describe adequate standards of care that clients should expect from financial institutions. A Client Protection Assessment evaluates how well an FI implements these standards.
A process of internal review to identify the FI’s strengths, weaknesses/risks, and ultimately opportunities to enhance its client protection practices. Your institution can do a self-assessment or can involve external assessors, but either way, your staff is very involved in examining the institution’s practices- so we say that it is an “internal review.” The assessment reveals your good practices, as well as those which you need to improve.
The ultimate purpose is to identify opportunities to improve your client protection practices. It is an excellent starting point when you aren’t sure which areas of client protection your institution should prioritize.

4. What are the Benefits to Your Institution?
Understand current practice
Establish a starting point for improving practice
Minimize risks
Prepare for Client Protection Certification
There are many benefits, including:
Understanding current practice. Most institutions understand some aspects of client protection, but don’t know what the globally-accepted standards are. Additionally, many want to understand how their own practices fit within these global standards. The assessment scores the institution against almost 100 separate indicators, providing an in-depth examination of all aspects of client protection.
Establishing a starting point for improving practice. An assessment provides baseline data, answering the question “What are our current practices?” This allows your institution to decide which areas of client protection need improvement and also to track progress over time.
Minimizing risks. Failure to implement strong client protection practices makes your institution vulnerable to many types of risks, including client default, client dissatisfaction, and reputation risk. By improving the weak practices identified by a Client Protection, your institution can minimize these risks.
Prepare for Client Protection Certification. Certification is an independent evaluation of the institution’s client protection practices. Institutions that fully implement all CP standards are publicly Client Protection Certified. Getting certified is a very in-depth process, and many institutions will benefit from first having a Client Protection Assessment before they try for Certification.

5. Which Type of Assessment is Best for Your Institution?
Three options (comparison on next slide)
Self-assessment
Accompanied self-assessment
Smart Assessment (external assessment)
Ask: “What can we devote to the assessment?”
Staff time
Money
Ask: “What are our objectives?”
Get familiar with client protection
Understand our practices
Improve our practices
Demonstrate our practices externally
Prepare for Client Protection Certification
Because different institutions have different objectives and resources, the Smart Campaign offers three different Client Protection Assessment options. The three are compared in the following slide, but briefly:
A self-assessment is a completely internal review, completed by the FI’s staff, using the Smart Campaign’s “Getting Started Questionnaire.”
An accompanied self-assessment is lead by an external TA provider who takes the FI staff through the assessment, providing facilitation and guidance.
A Smart Assessment is an external assessment lead by two accredited Smart Assessors who complete a week-long assessment of the institution and provide an in-depth assessment report for the institution.
To identify the best Client Protection Assessment for your organization, consider the following questions:
What can we devote to the assessment, in terms of staff time and in terms of resources? A self-assessment requires less engagement and is not costly at all—simply requiring staff time. The Smart Assessment requires more staff engagement and can cost several thousand dollars. Of course, the institution will get much more from a Smart Assessment, in terms of understanding of current practice and clear next steps.
What are our objectives? Institutions looking to simply learn more about client protection and get a general idea of current practice may start with a self-assessment. However, those that need more information on which practices to improve, want to demonstrate their practices to investors or others, and those wishing to prepare for certification should invest in a more in-depth Client Protection Assessment.

6. Which Type of Assessment is Best for Your Institution?
Self-Assessment
Accompanied Self-Assessment
Smart Assessment (External)
People
Just FI staff
FI staff w/ 1 external assessor
2 external assessors
Process
Self-reporting
Self-reporting w/ on-site support from assessor
Off-site and on-site
evaluation by assessors
Objective
- Get familiar w/ CP
- Understand current practices
Objectives at left, plus:
Begin integrating CP into operations
Improve current practice
- Prepare for certification
Output
Graphic overview of findings
Summary narrative report
w/ recommendations
Detailed narrative
report w/ action plan
Cost
Free
$- Cost of Assessor: 3–8 days
$$- Cost of 2 Assessors: days
Level of effort on-site
Summary: 3–5 days
Extended: 5–10 days
Extended: 3–8 days
Extended: 5–7 days
This slide compares the three types of Client Protection Assessments.
(Explanation of some of the terms)
People: An “external assessor” is someone trained by the Smart Campaign to complete Client Protection Assessments. For the Smart Assessment, the institution will choose a Lead Assessor and a Support Assessor. Lead Assessors have prior experience conducting Smart Assessments, and have been accredited by the Smart Campaign.
Output:
The Getting Started Questionnaire (self-assessment) automatically generates graphical overviews of the assessment scores but does not generate any details or recommendations.
The external assessor conducting an Accompanied Self-Assessment will create a summary report that provides some detail on the institution’s practices and some recommendations for how to make improvements.
The Smart Assessment output is a lengthy and detailed narrative report with details on each practice, a clear action plan, and suggestions for online resources available to the institution for improving practice.
Cost: The cost for the Accompanied Self-Assessment and Smart Assessment will differ, based on the consulting fees of the selected external assessors.
Level of effort on-site: Within the first two types Client Protection Assessment, an institution can choose the “summary” or the “extended” versions. The extended versions simply allow the institution to provide additional details about their practices so that the scoring and analysis is more comprehensive and accurate. The Smart Assessment is by nature an extended evaluation.

7. Results Graphics Example
This is an example of one of the graphics generated for each of the three Client Protection Assessments. The green area represents the percentage of indicators that the institution “fully meets,” the yellow area represents the percentage of indicators he institution doesn’t fully meet, and the red area represents the percentage of indicators that the institution doesn’t meet.
In this graph, we can see that the institution has the strongest practices for Appropriate Product Design and Delivery, and is weak on Privacy of Client Data, among others.
Scoring Legend for Graphs

8. Recommendations Example
Client Protection Principle 2: Prevention of Over-indebtedness
Topic:
Repayment Capacity Analysis
Indicator:
The FI performs a repayment capacity analysis at each loan cycle.
Score:
Recommendations:
The FI only performs a repayment capacity analysis before the first loan. The FI should perform a simplified evaluation at each new loan cycle. It should examine changes to the client’s business, income levels, and sources of credit. To reduce costs, this evaluation can be part of the routine loan utilization check that the loan officer performs at each new loan.
You’ll recall that the Accompanied Self-Assessment and the Smart Assessment include recommendations for each indicator that the institution doesn’t fully meet.
This is an example of a recommendation for one of the indicators under CPP2- Prevention of Over-indebtedness. The topic of this indicator is “repayment capacity analysis,” which is an important part of preventing over-indebtedness. The indicator text reads “The FI performs a repayment capacity analysis at each loan cycle.”
We see from the score icon that the institution doesn’t fully meet this indicator. Therefore, the assessor has offered the following recommendation: “The FI only performs a repayment capacity analysis before the first loan. The FI should perform a simplified evaluation at each new loan cycle. It should examine changes to the client’s business, income levels, and sources of credit. To reduce costs, this evaluation can be part of the routine loan utilization check that the loan officer performs at each new loan.”
This is an example of the type of recommendation that the institution will receive, for each indicator that could show improvement.

9. How Does Your Institution Get Started?
Get to know the Assessment tool, which lists the CP standards used in all three types of Assessments. Decide which Assessment is right for your institution.
Budget time and resources for the process and choose an external assessor, if needed.
Learn more about the Assessment process by reviewing Section 3 (page 7) of A Guide to Client Protection Assessments. [hyperlink]
If you are interested in knowing more about Client Protection Assessments, what can you do next?
First, download the Getting Started Questionnaire, which lists all of the client protection standards used in each of the three assessments. This will give you a sense of how you’ll be evaluated. The tool is available here:
Then decide which of the three assessments you want to undergo.
Next, budget the needed time and resources for the process. Discuss with the Smart Campaign a realistic timeframe and cost. If you are doing the Accompanied Self-Assessment or the Smart Assessment, contact potential assessors and choose the person/people you want. The Smart Campaign has a list of these assessors on their website:
- Finally, before starting an assessment, learn more about the process by reading the Smart Campaign’s “A Guide to Client Protection Assessments” which provides additional information beyond this presentation. The publication is available HERE.

10. Client protection is an essential part of SPM.
How does an assessment compliment other social performance management (SPM) assessments?
Client protection is an essential part of SPM.
TA providers can conduct a client protection assessment at the same time as a social audit or social rating.
This reduces cost and can help your institution understand how client protection fits within your other SPM operations.
How does an assessment compliment other social performance management (SPM) assessments?
Client protection is an essential part of social performance management, because in order to positively affect clients’ lives, an institution must ensure that clients are not harmed by using its products and services. Many institutions integrate their client protection objectives into their overall social goals.
As such, a Client Protection Assessment can be integrated into another SPM assessment, including a social audit or social rating. In fact, the CERISE SPI-4, as well as the rating products from most specialized microfinance rating agencies, include all of the client protection standards used by the Smart Campaign. Therefore, these products evaluate the same indicators as a Client Protection Assessment. If you are using a TA provider to evaluate your overall SPM practices, you can ask that they place a special emphasis on client protection during the evaluation.
Such an approach can reduce the time and cost to your institution, while providing valuable information not only on your client protection practices, but your overall social performance systems.

11. How can my institution build on the assessment?
Client Protection Certification
The assessment reveals specific weaknesses/risks.
Your institution chooses specific issues to improve. The institution develops an action plan and implements it.
The institution is evaluated for Client Protection Certification. If the institution fully implements all CP standards, it is publicly Client Protection Certified.
“Upgrading” project
Assessment
After completing a Client Protection Assessment, there’s still more you can do to strengthen your practices and demonstrate your practices externally.
As previously discussed, an assessment reveals specific weaknesses and risks related to client protection. A common and practical next step is to develop and execute an “upgrading” project. This refers to the process of choosing one or several weaknesses to improve. Your institution develops a clear action plan for improving practice and then implements it. One example would be developing a client data privacy policy, training staff on the policy, and disseminating it among clients. This would be an “upgrade” to the institution’s practices on Privacy of Client Data.
Additionally, some institutions may choose to pursue Client Protection Certification. You can do this regardless of whether you implement an upgrading project, but many institutions find that after they complete an assessment, they need to improve in certain areas before they can become certified.
Certification is a more in-depth process than a Client Protection Assessment. Like a Client Protection Assessment, it is an independent evaluation of the institution’s client protection practices, but requires that the that fully implement all CP standards before the institution is publicly Client Protection Certified.
If you are interested in knowing more about Certification, see the Smart Campaign’s website:

12. Contact the Smart Campaign for more information
Contact the Smart Campaign for more information!