Material customer detrimentrefers to service disruptions thatcause financial loss, inability to access essential services, or significant hardship.
PRMIA andUK FCA Operational Resilience Standardsdefine"significant harm" as going beyond inconvenienceto includemonetary or operational distress.
Significant harm occurs when customers face tangible financial or service losses, not just reputational inconvenience.
Regulatory frameworks (e.g.,Basel, FCA, PRMIA) require banks toprotect customers from material disruptions.
Option A ("Low threshold, any complaint")→ Incorrect becausenot all complaints indicate material detriment.
Option B ("Inconvenience and reputational damage")→ Incorrect becausetrue material harm is more than just inconvenience.
Option C ("Financial system resilience")→ Incorrect because thisdescribes systemic financial stability, not customer impact.
Step 1: Definition of Material Customer DetrimentStep 2: Why Option D is CorrectStep 3: Why the Other Options Are Incorrect
PRMIA Operational Resilience Framework– Defines material customer detriment.
UK FCA Operational Resilience Guidelines– Requires firms to minimize severe harm to customers.
PRMIA Risk References Used:
Final Conclusion:Material customer detriment involves actual financial hardship, not just inconvenience, makingOption D the correct answer.
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