Target market determinations (TMDs) and website analytics

Target market determinations and financial products: website analytics should be in your template

ASIC regulatory guidance now specifies web analytics as a requirement in distributing and issuing financial products

In December 2020 ASIC issued a regulatory guideline (RG 274) for issuers and distributors of financial products to retail clients which specifically refers to using website analytics to monitor whether their products are reaching the target market in accordance with their “target market determination” (TMD).

TMDs are mandatory for issuers to determine and distributors to report on.

This is both a worldwide regulatory trend but also had its origins in the 2019 Hayne Report into the banking industry.

The regulatory guideline says in para 154 a TMD should:

“take into account all available information on its financial product using multiple data sources. This could include:

(a) Information the issuer holds about the product and its distribution, for example:

(i) volume of sales; 

(ii) percentage of sales to consumers who are not in the target market; 

(iii) conversion rates; and 

(iv) web analytics (e.g. click data and website paths)…”

In light of this, organisations issuing or distributing financial products to retail clients should place more focus on practical website analytics capabilities: both for regulatory compliance as well as more traditional market intelligence reasons.