Industry Thoughts

It wasn’t until late 2024 that UK fraud leaders began taking notice of the rise of synthetic identity fraud – until then it had been an unrecognised threat, with most organisations lacking monitoring and reporting insight. However, in the US, synthetic identity fraud has been surging, with estimated exposure of $3.1 billion across sectors in 2024.

In recent years, along with other sectors the financial services industry has been highlighting the significant benefits from the usage of artificial intelligence (AI). Some of the largest perceived benefits include in combatting fraud, customer engagement and services, and customer care. Similarly, apps and digital platforms have changed customer journeys.

A successful migration is more than moving data – it’s about transforming both the data and the business. Having led and seen dozens of migrations, here are the lessons that matter most before making the leap, informed by some of Lenvi’s recent migration projects.

A resilient subprime credit market is essential to providing access to credit among underserved groups and ensuring financial inclusion in a changing regulatory and competitive landscape. The size and shape of the subprime credit sector has changed considerably over the past decade which has been driven by a combination of regulatory reforms, shifting consumer behaviours and economic pressure. By way of example, the ‘high-cost’ credit sector has reduced by almost £3 billion of lending since 2019, with more than 250 firms exiting the market, according to the FCA.

To customers, lenders and brokers are one experience. The FCA’s Consumer Duty makes that explicit: any firm that can determine or materially influence a retail outcome has responsibilities commensurate with its role. That has real consequences for distribution. Manufacturers must design products for a defined target market and monitor how brokers sell them, including the cumulative impact of fees and commissions on fair value. Discretionary commission models in motor finance are gone, but the principle remains: if incentives can predictably distort outcomes, they must change.

As the festive season approaches, so too does the pressure to spend. From social media wish lists to endless retail promotions promising the ‘perfect’ Christmas, the expectation to buy, give and celebrate grows stronger each year. As a result consumers are choosing to spread the cost of festivities, leading to a surge in short-term credit, particularly through Buy Now, Pay Later (BNPL) schemes.

Financial wellbeing is a cornerstone of modern life, yet for millions of UK adults, it remains out of reach. New research on financial stress in the UK by LexisNexis® Risk Solutions reveals that the scale of financial exclusion and credit distress is still significant, despite some progress in recent years.

So we finally have it. The FCA published its consultation, CP25/27, on its proposed motor redress scheme on 7 October 2025. All 360 pages of it. But there’s more: the FCA also published a press release and a statement to the market. And in the CP, there’s even more: a ‘diagnostic report’ covering 81 pages a ‘Technical Annex 1’ covering 153 pages a ‘Technical Annex 2’ covering 39 pages a ‘Technical Annex 3’ covering 26 pages.

For lenders and consumer credit firms, reliable and cost-effective payment collection is critical. As card payments face increasing costs, failures, and compliance pressures, Variable Recurring Payments (VRPs), powered by Open Banking, are emerging as a transformative alternative. For lending businesses managing recurring payments, understanding this comparison is crucial for optimising revenue collection and reducing operational overheads.

Lenders are continuously facing increased regulatory pressure, rising customer expectations, and ongoing economic uncertainty. The ability to provide timely, relevant, and sensitive support is more important than ever. Artificial intelligence is becoming an increasingly powerful enabler in this area, not just in assessing affordability or making lending decisions, but in how organisations engage with borrowers throughout the credit lifecycle.

In an era defined by economic shifts and heightened regulatory scrutiny, the UK lending landscape has undergone a dramatic transformation over the last two decades. From the Credit Crunch in 2007 to the introduction of the FCA in 2013 and the subsequent rollout of the CONC sourcebook and creditworthiness rules, the focus has consistently sharpened on responsible lending and tackling consumer indebtedness

At Square 4, our flagship Consumer Duty thought leadership programme has given us unparalleled insight into a wide range of Consumer Duty board reports across wealth management, CASS, consumer credit, insurance, and banking. We’ve identified not just common themes and pitfalls, but also the strategies that set market leaders apart.