Features | 20/06/22

We held our first conference since before the pandemic, on the 27th April in Liverpool. Here we pick up on some of the themes and discussions from the speeches and panel sessions that made up the agenda.

After our Chief Executive Jason Wassell opened the conference, we began our first panel session, A mile in their shoes: understanding the alternative lending customer, sponsored by Lantern.

The purpose of this panel was to look at customers and understand how they manage their finances. Panellists told how the pandemic had different impacts on different segments of consumers. It had also driven change in how customers want to interact. Customer engagement is therefore increasingly important via digital channels, but there are some that still prefer face-to-face interaction.

After our morning break which included a visit to the exhibition area for many, the keynote session of the day was delivered by Brian Corr, Interim Director of Retail Lending at the FCA. We are very grateful that Brian was able to attend the entire conference and dinner to hear from members.

In his speech Brian talked about the role alternative credit can play within the wider market. He also referred to the regulator’s three year strategy document which sets out the importance of reducing and preventing harm, while promoting competition and positive change.

Access to credit was also cited as borrowers need to have access to affordable products which meet their needs. Lastly, Brian talked about how the Consumer Duty measures are expected to allow the FCA and lenders to become more adaptive in delivering good customer outcomes.

We then moved on to a panel session that looked in more detail at some of the regulatory measures, sponsored by Themis Consultancy.

There was a general consensus among the panelists that the financial services industry had reacted quickly during the pandemic and became part of the front line approach. The Consumer Duty was described as the biggest challenge for lenders moving forward and it was suggested that firms would benefit from starting to prepare now. This could include asking ‘do we understand our target market’, reviewing the customer journey and conducting a gap analysis.

After lunch, the third session of the day commenced with a presentation from the Illegal Money Lending Team, delivered by Cath Wohlers. Cath updated the conference on the current state of illegal lending, talking about loan sharks that are increasingly operating online using social media to entice and exploit new victims. She also mentioned the recent report from the Centre of Social Justice that highlighted that one million people are believed to owe money to an illegal lender.

It was then time for a panel on technology, looking at new innovations in lending, kindly sponsored by Aryza. While ‘a well-regulated successful credit industry can only be a good thing’, the provision of open banking and digital customer communication have provided more options to the credit industry to explore as part of the customer journey.

We heard that the pandemic has aided the acceptance of Open Banking technology by the consumer which means there is more information such as affordability data and identification of fraud available.

One of our headline sponsors, Walker Morris, gave a presentation on different ways for firms to raise finance before we turned to the last session of the day, a fireside chat with John Wightman from the Financial Ombudsman Service (FOS), which also gave the audience members an opportunity to put questions to the Ombudsman.

Central to the discussion was the issue of affordability complaints which reached a high in 2017/18 but have since fallen significantly. John talked about the need for firms to have an adequately resourced complaints process, making it easier to stay on top of complaints as opposed to dealing with a backlog.

He also mentioned that a consultation paper will be launched on how FOS can adapt their funding model. At present, CMC’s do not contribute and it is possible that a levy on them would require some legislative change beforehand.

Following this Jason Wassell brought the conference to a close.