Chang Hwa Bank|Corporate Social Responsibility-Customer Rights and Interests

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Fair Treatment of Customers

The Bank has established a corporate culture that emphasizes financial consumer protection, with the "Principle to Treat Clients Fairly" at its core. It treats financial consumers in a fair and reasonable manner, ensuring the protection of their rights.

Policy and Commitments

The Bank implements the Financial Consumer Protection Act and relevant regulations, as well as the "Principles for Financial Service Industries to Treat Clients Fairly." We have formulated internal operating guidelines such as the "CHB Fair Customer Treatment Code," “CHB Financial Consumer Protection Policy," "CHB Financial Consumer Protection Practice Guidelines," and "CHB Consumer Complaint Handling Guidelines." The entire bank is informed that these guidelines should be strictly followed in providing financial products or services to protect the rights and interests of financial consumers.

Responsibilities and Management

Treat Customers Fairly Facilitating Committee

The Bank attaches importance to fair hospitality and has set up the "Treat Customers Fairly Facilitating Committee" (approved by the 26th Board of Directors at its 23rd meeting on February 22, 2022), which is chaired by the President and is composed of Vice President and Chief Compliance Officer. Through the coordination of senior managers and interdepartmental collaboration, the Bank will enhance all employees' awareness of financial consumer protection and the compliance of the Principle to Treat Clients Fairly, which will help reduce cost of noncompliance and increase customer confidence in the Bank's financial services.
The Bank convenes quarterly meetings of the "Treat Customers Fairly Facilitating Committee." In 2023, a total of 4 meetings were held, during which 18 case reports were presented. These reports encompassed various aspects such as optimization and improvement of customer complaint case analysis, financial-friendly service measures, and suggestions for self-improvement in fair treatment of customers, totaling 123 items. The Board of Directors was informed about the Bank's adherence to the principle of fair customer treatment.
The main proposals on the Treat Customers Fairly Facilitating Committee are reports on financial-friendly service innovation and vulnerable groups protection measures, and proposals of improving plans by referring to the implementation of fair treatment of customers of peers, including the establishment of financial-friendly benchmark branch, the measure that the customer service system gives priority to customer based on their disability to proactively decrease the financial digital gap of disadvantaged groups. We also reviewed the causes of customer complaints involving the main types of fair treatment of customers, strengthened relevant control measures and held education and training, and improved and optimized relevant operating procedures for weak points to reduce the customer’s complaint.

Implementation of the Ten Principles of Fair Treatment of Customers
The Bank considers customer needs throughout the entire transaction process, including design, advertising, sales, and contract fulfillment to service consultation and complaint handling for all financial products or services. This ensures fair treatment of customers in compliance with regulations for financial consumer protection.
Before entering into a contract to provide financial products or services to young and elderly customers, the Bank would get well understanding of the customer's relevant information to carefully evaluate the suitability, and fully explain the content of the contract and related risks of the product or service to the customer to protect their rights and interests.

Fair Dealing and Good Faith in Contract: The Bank enters into a contract for providing products or services with customers based on the principles of fair dealing, reciprocity, and good faith, and fully explains the important contents of products, services, and contracts while disclosing the risks.
Duty of Care and Loyalty: The Bank should provide the financial products or services with the care of a good administrator and in good faith.
Truth in Advertising and Solicitation: The Bank, in advertising or carrying out solicitation, shall not engage in falsehood, deception, concealment, or other conduct sufficient to mislead the financial consumer and shall ensure the truthfulness of the content of its advertisements and solicitation.
Product or Service Suitability: The Bank has established a product suitability system to provide products or services suitable for customers through know-your-customer (KYC) and know-your-product operations (KYP). The Bank adheres to the Principle to Treat Clients Fairly, including fair and honest contractual obligations, suitability of products or services, disclosure and transparency, friendly services, and the practice of integrity in business operations when providing financial products or services. We requires financial consultants to comply with the KYC and KYP policies in order to ensure the appropriateness of the goods or services to the customer, in particular for the elderly customer, the important content of the financial products or services should be explained in a language or other way that the customer fully understands, and the risks should be fully disclosed in order to ensure the rights and interests of the customer.
Notification and Disclosure: The Bank explains the important contents of the financial products or services provided in words or other ways that customers can fully understand, and fully disclose the risks. When personal data is involved, the relevant rights and interests protection should also be fully explained to customers.
Balance Performance-based Remuneration: The remuneration system for business personnel should take a balanced consideration of customer rights and the various risks posed by financial products or services to the Bank and its customers, and should not rely on the performance as the sole criterion for remuneration.
Grievance protection: Establish a friendly consumer dispute handling procedures, and provide flexible and appropriate channels for customer service to resolve disputes quickly and effectively and improve service quality.
Professionalism of Business Personnel: Business personnel should have the qualifications stipulated in relevant laws and regulations and receive regular training to ensure that they can provide customers with professional and suitable financial services.
Friendly Service: The needs of the elderly, Disabilities and disadvantaged groups are taken into consideration at all stages from design to the sale of products and services; and the monitoring, evaluation and review of effectiveness of processes and policies for treating customers of different groups fairly and reasonably is implemented to promote inclusive finance.
Implement of integrity Management: Adhering to the business philosophy of honesty, transparency and responsibility, we establish an effective internal control system based on integrity and create a business model for sustainability development.

Management Measures

The Bank considers customer needs throughout the entire transaction process, including design, advertising, sales, and contract fulfillment to service consultation and complaint handling for all financial products or services. This ensures fair treatment of customers in compliance with regulations for financial consumer protection.
The promotional materials, advertisements, and marketing activity information provided for insurance products have been reviewed and found to be free from inappropriate, false statements, misleading financial consumers, or violations of laws, regulations, and standards. In addition to distributing printed promotional materials featuring the Bank's logo and branding, we will also publish relevant information on our official website to enhance customer accessibility.
The Bank enters into a contract for providing products or services with customers based on the principles of fairness, reciprocity, and integrity, and fully explains the important contents of products, services, and contracts while disclosing the risks.
The Bank has established a product suitability system to provide products or services suitable for customers through know-your-customer (KYC) and know-your-product operations (KYP). The Bank adheres to the Principle to Treat Clients Fairly, including fair and honest contractual obligations, suitability of products or services, disclosure and transparency, friendly services, and the practice of integrity in business operations when providing financial products or services. We requires financial consultants to comply with the KYC and KYP policies in order to ensure the appropriateness of the goods or services to the customer, in particular for the elderly customer, the important content of the financial products or services should be explained in a language or other way that the customer fully understands, and the risks should be fully disclosed in order to ensure the rights and interests of the customer.
Product Review Meeting - Regarding the investment-linked financial products or services represented by the Bank that have been put on the market, we will evaluate the suitability of the products or services for customers based on their characteristics, and remove those products that are determined to be unsuitable after review.
Before launching new products, businesses, or services, or when changes in existing businesses may affect compliance risks, consumer rights, internal controls, or risk management systems due to factors such as product structure, risk level, or target audience, every business management unit of the Bank should perform confirmation checks according to the "Compliance Checklist for New Products, New Services, or New Business. “The checklist covers regulations such as the Financial Consumer Protection Act, Regulations Governing the Suitability of Financial Products or Services for Financial Consumers by Financial Services Enterprises, and the Principles for Financial Service Industries to Treat Clients Fairly, etc. This ensures the protection of the rights and interests of financial consumers and compliance with laws and internal regulations in the Bank's operations.
Every year, the Bank conducts evaluation of the FSC's "Principle to Treat Clients Fairly" of consumers in accordance with the principle three lines of defense in internal control, declared the evaluation and implementation status, and submitted it to the Board of Directors for review and then to FSC for verification, to strengthen the protection of financial consumers' rights and interests.
The Bank's compliance risk assessment (CRA) now includes penalties from financial supervisory authorities into evaluation metrics, monitoring potential penalty risks for our violations of laws and regulations (including credit, deposits, wealth management, digital financial products and services, as well as information security). In 2023, the Bank did not incur any penalties from financial supervisory authorities.

Internal Audit

When the internal audit unit conducts general and ad-hoc inspection, it also conducts an audit of the implementation of financial consumer protection or Principle to Treat Clients Fairly, carried out 213 general inspections and 490 project inspections in 2023, followed up deficiencies until improvement completion, and compiled the relevant deficiencies to business management units for discussion and improvement to ensure the effective enforcement of laws and regulations.
The Bank adopts a risk-oriented internal audit system. Based on the attributes and comprehensive risk assessment results of each subject under review, the Bank has established audit items for operations related to financial consumers and the Principle to Treat Clients Fairly. Deficiencies are periodically compiled and provided to business management units for discussion on improvements in order to implementing relevant operations.

Implementation Status

The Bank's 'Assessment Form for the Implementation of the "Principle to Treat Clients Fairly" in the Financial Services Industry for the Fiscal Year 2023' has been completed and submitted for review to the Treat Customers Fairly Facilitating Committee and the Board of Directors. It will then be submitted to the Financial Supervisory Commission for reevaluation and deliberation. The Financial Supervisory Commission announced the evaluation results of the Principle to Treat Clients Fairly for 2023 on July 18, 2023. The Bank was ranked in the top 26%-50% of the Banking industry and will continue to enhance and implement measures to ensure fair treatment of our customers.
The Bank organized a forum event called "Emerging Trends and New Values in Fair Customer Treatment" on December 11, 2023. The Chairperson delivered a keynote speech, and the President participated as a panelist to discuss management trends and inclusive financial measures. Around 300 participants attended the event.
On June 28, 2023, the Bank hosted the "Chairperson's One-Day Customer Service Event," during which the Chairperson and check-in staff collaborated to answer customer calls. This event not only showcased our sincere concern and commitment to our customers through tangible actions, but also provided us with insights into the interaction process between our customer service colleagues and customers. The chairman provided valuable feedback and guidance to further improve our customer service at the Bank.
The Bank organizes consumer protection advocacy and training on Principle to Treat Clients Fairly to enhance the professionalism of business staff and improve customer satisfaction, with a total of 41,017 participants in 2023.
In 2023, the Bank engaged external professional training institutions in one training courses on fair treatment of customers and financial friendliness for directors, senior executives, and business unit managers. This was done to establish a corporate culture that values financial friendly services from top to bottom.

Customer Complaint Mechanism

Customer Complaint Channels

The complaint channels for handling disputes with respect to financial products or services provided by the Bank are listed in the product contracts; there are also a 24/7 customer service hotline, Text conversations with real customer service representatives, "Customer Message" section on the Bank's official website, mailbox and other open channels to provide customers with consultation services and accept complaints or feedback at any time. The Bank properly responds to suggestions from customers or disputes arising from financial products or services provided by the Bank.

Telephone

For local telephones, please dial: 412-2222; press 9 to be transferred and talk to responsible personnel (charged as local phone calls).
For mobile phones, please dial: (02) 412-2222; press 9 to be transferred and talk to responsible personnel.
Toll-free service hotline: 0800-365-889; press 9 to be transferred and talk to responsible personnel.
Direct contact with customer service representatives via the Bank's official website or Personal e-Banking, under the "Contact Us" – "Online Calls".
The Bank's CHB Mobile Network App- "Customer Service Center" - "Internet Phone" and talk to responsible personnel.

Official website of the Bank- "Customer Service Center" - "Customer E-mail Messages," leave your opinions and personal basic information, the Bank's customer service personnel will handle and reply during business hours.
Text conversations with real customer service representatives are available through the Bank's official website, Personal e-Banking, CHB Mobile Network App, and official accounts on Facebook and LINE using the "Smart Customer Service" feature.

Handling of Customer Complaints

The Bank has formulated the Consumer Complaint Handling Guidelines, which regulate the acceptance, handling procedures, progress inquiries, and handling timeframes for financial consumer disputes. Upon receiving customer complaints, they are promptly handed over to the responsible business units for appropriate handling to protect the rights of financial consumers.
To effectively reduce the frequency of financial consumer disputes and improve service quality, the Bank regularly reviews the types and handling of such cases. We compile and analyze the causes and reasons for consumer disputes and develop improvement measures by the responsible business units for continuous review and improvement. Changes in the number of cases are tracked regularly and reported to the Board of Directors. The Bank will continue to optimize operational processes to ensure the effectiveness of solutions to customer complaints, enhance service quality and efficiency, and provide comprehensive protection for the rights of financial consumers.

Customer Size

I. Checking and Savings Accounts

As of December 31, 2023 Unit: million NT$

		Number of accounts	Balance of deposits
Individual (natural person)	NTD saving account	7,681,501	1,214,565
	Checking account	169,514	6,743
	Foreign exchange deposit	368,634	145,717
Enterprise	NTD saving account	282,334	532,498
	Checking account	66,645	29,632
	Foreign exchange deposit	44,086	325,487
Total amount of balance of deposits			2,225,010

Enterprise
		Number of accounts	Balance of deposits			Number of accounts	Balance of deposits
Small enterprise*1	NTD saving account	41,769	56,420	Other non-small enterprise	NTD saving account	240,565	476,078
	Checking account	10,998	3,821		Checking account	55,647	25,811
	Foreign exchange deposit	5,667	21,975		Foreign exchange deposit	38,419	303,512

Note:

1. "Small enterprise" refers to companies with a capital of less than NT$ 30 million.
2. The balance of NTD deposit account/checking account do not include public treasury deposits, deposits from other financial institutions, and postal remittance deposits.
3. As accounts, such as omnibus deposit account and digital deposit account, which involve deposits in NTD and other foreign currencies, the number of accounts and balances are included in the data of the NTD deposit account.
4. Since the same customer can open multiple accounts, the number of accounts is not equal to the number of the Bank's customers, only the balances are totaled.

II. Loan recipients

As of December 31, 2023 Unit: million NT$

Total	Number of accounts	146,229	Individual (natural person)	Number of accounts: 115,049	Average credit balance: 639,343
Total	Average credit balance	1,677,807	Enterprise*	Number of accounts: 31,180	Average credit balance: 1,038,464

Note: "Small enterprise" refers to companies with a capital of less than NT$ 30 million among enterprises.

Customer Satisfaction

Satisfaction toward Digital Banking Services

In order to improve the quality and efficiency of the Bank's digital banking services, and to understand the satisfaction and recommendations of customers with regard to their e-banking experience, we conduct the "Customer Satisfaction Questionnaire Survey" on a yearly basis, as a reference for improving online banking functions and business development, thereby enhancing customer adoption willingness.

Survey Period: From October 16 to December 15, 2023
Survey Participants: Users of the Bank's "Personal e-banking" and "Mobile e-banking App (CHB Mobile Network)," as well as "Corporate e-banking (CHB e-banking)" and "Corporate Mobile Network App."
Survey Content: Including the smoothness of e-banking operations, system stability, and overall evaluation.
Survey Results

Overall satisfaction: Most customers gave positive feedback.

"Corporate e-banking and Corporate Mobile Network App": Received 88.07% of "satisfied" or above*
"Personal e-banking and CHB Mobile Network App": Received 87.96% of "satisfied" or above*
Note: "Satisfaction or above" includes both "satisfied" and "very satisfied".

Frequently used key features:

Corporate e-banking
・ Account overview (92.87%)
・ NTD & foreign currency receipt and payment (83.36%)
Personal e-banking
・ NTD demand deposit balance (90.44%)
・ NTD transaction details (82.63%)
・ NTD transfer (82.17%)

Areas for improvement
As some users expressed dissatisfaction with system performance, the Bank will continue to optimize the online banking system to improve customer experience.

Satisfaction toward Physical Channel Services

In order to improve the quality and efficiency of the Bank's services, the Bank conducts an annual customer satisfaction survey for physical channel services. In addition to surveying counter customers using paper questionnaires, in response to the advent of digital finance, customers can also use the Bank's public computers, scan the QR Code on the digital number tag, or other diverse means to complete the questionnaire.
Based on 2023, this survey was conducted to measure customer satisfaction and gather opinions from customers of the Bank in three major aspects: "Financial Products Satisfaction," "Service Attitude and Professional Competence" and "Overall Service Satisfaction."
To strengthen the depth and scope of the content of our customer satisfaction survey, the survey of this year provides open-ended questions for customers to provide feedback for improvement. Regarding customer suggestions to increase financial products, improve the internet banking app interface, and install deposit machines, the Bank will promptly review and make improvements, continuously strengthening service quality and customer service to enhance customer satisfaction.

Survey Results
The satisfaction with "Service Attitude and Professional Competence" is 91.55%, the highest of all, followed by "Overall Service Satisfaction" (90.93%) and "Financial Products Satisfaction" (89.30%).

Customer Satisfaction Survey in the past three years

Item/FY	2021	2022	2023
Financial Product Satisfaction	88.73%	89.71%	89.30%
Service Attitude and Professional Competence	91.11%	92.12%	91.55%
Overall Service Satisfaction	90.18%	91.68%	90.93%

Future Outlook

With the principles for fair treatment of customers as the core, the Bank will listen to customers' opinions, continue to promote financial innovation and strengthen digital services, and strive to provide customers with the best financial experiences, thereby creating a satisfactory and reliable financial brand. In 2024, we plan to implement the ISO 10002 International Standard for Complaints Quality Management to better understand customer expectations for products or services and enhance the quality and effectiveness of our complaint management.