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EMPOWERING CONSUMERS
THROUGH THE USE OF CREDIT TECHNOLOGY

Aryza

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For UK consumers, the current economic climate continues to create challenges. As the cost-of-living increase continues to intensify, many are concerned that they will no longer be able to keep up with their regular monthly outgoings. In fact, the Office for Budget Responsibility, predicted that UK household real income in 2022 would contract at the sharpest rate since records began in the 1950s.

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DEAR CEO
ARE YOU DOING ENOUGH?

Themis Consultancy

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A ‘Dear CEO’ letter is fast becoming the choice instrument of communicating with regulated firms. Such letters serve to focus the attention of a firms’ CEO and accountable senior managers on crucial issues for the FCA. On this occasion, the FCA issued a Dear CEO letter on 6th May 2022 to consumer credit firms demanding immediate action to ensure firms’ financial promotions are clear, fair and not misleading.

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NAVIGATING THE MAZE
THE IMPORTANCE OF CREDIT AND THE CONSUMER DUTY

Square 4

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Inflation is biting. Food, petrol and energy bills – the essentials for many are rising at rates not seen for a generation. Many households are struggling and will continue to have to make some difficult choices through these challenging times. The demand for credit is therefore likely to rise, as is the support that existing borrowers are likely to require. As a result, the focus on the consumer credit sector from the FCA will be a key priority.

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A CULTURE OF OPENNESS
MEETING THE CHALLENGE OF THE CONSUMER DUTY

Lantern

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There is quite often an assumption, that as all businesses offering financial services are regulated by the same governing body (the FCA), they’re all delivering the same level of service ... wrong! The need for the new Consumer Duty reflects that whilst there is a basic standard that is required of firms, the bar can, should and has to be raised. The FCA want “firms to be incentivised to compete in the interests of consumers." This is a competition we should all be fighting to win.

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MOVING FROM LIP SERVICE TO ACTION
TREATING VULNERABLE CUSTOMERS FAIRLY

Vulnerability Registration Service

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The media has recently been flooded with government and royal scandals and, while the fuel crisis has received some airtime, the potential impact on millions of households has not received the publicity it merits. The decision of to ‘Eat or Heat’ is a very real threat to many. The negative impact on household expenditure a risk to us all.

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TEETERING ON THE EDGE?
FAIR FOR YOU PARTNERS WITH ICELAND

Fair For You

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As a responsible lender focused on providing ethical credit to those unable to access mainstream credit, Fair for You hears a lot of our customers say that they are teetering on the brink of financial crisis all year round. They live in dread of unexpected bills and out of the ordinary expenses. For many, a free school meal is a crucial part of their children’s diet, often the only hot meal they get. And when the school term ends, so does that, leaving those parents needing to find a way to bridge the financial gap during the holidays and feed their families.

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NURTURING LOYALTY
ARE YOU BUILDING LOYALTY IN YOUR NEW RECRUITS?

TieTa

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Covid has turned our view of the world on its head. Our sense of belonging and connection has changed significantly, our habits and routines have altered, and our appreciation of things has shifted. Businesses discovered that it’s a face-to-face transaction that generates real loyalty, customers connect with people and the impressions they make, their helpfulness, service and attitude. In contrast, the web-based world is as loyal as the service is good. Without the face of a person and someone to connect with, once something goes badly, loyalty is switched off and it's just too easy to go somewhere else.

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WHAT LIES AHEAD?
A VIEW OF POTENTIALLY WORRYING TRENDS

Data on Demand

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Members will no doubt be aware of the continued focus by the FCA on the assessment of consumer vulnerability as part of their ongoing Consumer Duty consultation. They have made it clear that more is expected from lenders with a recent survey highlighting 27.7 million adults in the UK with characteristics of vulnerability such as poor health, low financial resilience or recent negative life events.

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FOREWARNED IS FOREARMED
THE IMPACT OF CONSUMER DUTY AND WHY FIRMS SHOULD ACT NOW

Huntswood

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In May 2021, the Financial Conduct Authority (FCA) published its Consumer Duty Consultation paper, setting out its expectations of firms to provide higher standards of care for their consumers. We commented on this and how long firms had to prepare for changes (CCTA publication July 2021) and we now further explore what firms should be doing, and what we are already seeing in the sector in anticipation of the final policy statement expected later this year.

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WHAT NEXT?
A CLOSER LOOK AT BUY-NOW PAY-LATER

Cashflows

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The payments and financial services sector has changed radically, with shifting consumer and business preferences accelerated by the Covid-19 pandemic. As we move into 2022, I expect to see further innovation and growth, in line with the huge digital shift and prioritisation of personalised consumer experiences that we have seen in 2021. While there is still uncertainty, the payments sector must leverage collective transformation efforts to align with the changing needs of the future customer.

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FRUSTRATION NAVIGATION
PROVIDING A FRICTIONLESS SERVICE TO CUSTOMERS

Lantern

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We all appreciate vulnerable customers in collections require help, but do our systems deliver that? Vulnerable customers, particularly, need to feel like they can contact third parties to discuss their situation without judgment. Let’s face it, it’s often not easy for customers to pluck up the courage to get in touch but, when they do, they really want and need slick, frictionless processes. That’s why having customer centric systems for customers and colleagues to navigate, is critical to a successful customer journey.

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A TOOL FOR EVERY JOB
SUPPORTING CUSTOMERS THROUGH FINANCIAL RECOVERY AND RESTRUCTURING

Aryza

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Having recently announced the rebrand of the Debtsense suite of products, Aryza is working to develop a new range of solutions, to ensure consumers feel supported throughout the financial recovery and financial restructuring journey. Here, Karen Emmett, Head of Consumer Products at Aryza, examines the functionality of the different products within her portfolio and discusses how they’re already proving invaluable to customers.

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NOT OUT OF THE WOODS YET?
DESPITE SUMMER REPRIEVE FROM COVID IMPACT, CONSUMERS FEAR LONGER-TERM FINANCIAL RECOVERY

TransUnion

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With the relaxation of lockdown, alongside hospitality and travel industries re-opening over the summer, consumers are less likely to think the pandemic has impacted their household income, according to recent research from global information and insights provider TransUnion.

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LOOKING CLOSELY
FCA CONSULTS ON CONSUMER DUTY

Huntswood

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In May, the Financial Conduct Authority (FCA) published its Consumer Duty Consultation (CP21/13), with an aim to set higher expectations for the standard of care that firms provide to consumers. These proposals will significantly raise the expectations placed on firms in terms of monitoring and increasing standards to create better customer outcomes. Naturally, responsibility for ‘accountable individuals’ will increase too.

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GOING THE EXTRA MILE
BEST PRACTICES FOR VULNERABLE CUSTOMERS

Lantern

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I recently had the pleasure of hosting a Summit wholly dedicated to Vulnerability. It’s clear that vulnerability is high on the agenda for all of us, particularly with the potential debt tsunami which is threatening to arrive, but are we doing enough? To use a phrase used by one of the speakers at the event, “We need to understand more, care more and do more”.

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IN CHAINS?
BUSINESS DEVELOPMENT SHACKLED BY LIMITED ACCESS TO WORKING CAPITAL

Cashflows

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During the COVID-19 pandemic, 68 percent of small and medium businesses in the UK reported a negative impact on cash flow, and, for any business where success is built on supplying funding to others, having access to working capital is crucial. Without it, finance providers are limited in the levels of business they can underwrite and could find their business development efforts shackled. Losing out on new credit and loan customers because the funding is unavailable is a tough pill to swallow at any time – but especially in the current climate when revenue and new business are hard to come by.

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GUIDING LIGHT
MORTGAGE PRISONERS, WHAT STEPS CAN THE INDUSTRY TAKE TO HELP?

Aptean

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In the UK, borrowers trapped in their current, more expensive mortgage who can’t re-finance for a cheaper loan have been dubbed ‘mortgage prisoners’ in recent years. The pandemic shone a spotlight on their situation. A recent report by the London School of Economics (LSE) found that those in this situation were up to 40% more likely to default on their mortgage payments.

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TREAD GENTLY
SAFEGUARD AND PROTECT: IS THIS WHAT THE FCA REALLY MEAN?

Lantern

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The very clear message from the Financial Conduct Authority (FCA) in their Guidance for firms on the fair treatment of Vulnerable Customers (FG21/1) is that organisations must have good clear strategies for identifying and dealing with vulnerable customers. Customers experiencing financial vulnerability has not just been caused by the pandemic, this isn’t new, however what is new is the unprecedented circumstances we have all had to endure throughout the last year, and it’s not over yet. The economic impact of the pandemic (still not fully known) has brought vulnerability to the forefront of the FCA’s agenda, hence the expedited publication of the new guidance.

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SPACE TO BREATHE
ADAPTING SYSTEMS FOR BREATHING SPACE

Aryza Lending Solutions

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Coming into force on the 4th of May 2021, The Debt Respite Scheme, otherwise known as breathing space, will impact how consumer credit lenders and debt collection agencies interact with individuals struggling to manage their debt. Here, Paul O’Sullivan, Aryza Lending Division CEO, explores what this means for lenders and how new technologies can help minimise disruption and provide greater support for consumers.

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ROAD TO RECOVERY
THE FCA’S COVID ROADMAP AND ACHIEVING THE RIGHT CUSTOMER OUTCOMES

Themis Consultancy

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As we all patiently navigate the four steps of the roadmap out of lockdown, users (and providers) of personal loans, credit cards, store cards, catalogue credit, rent to own, buy now pay later, pawnbroking, motor finance and high-cost short-term credit (HCSTC), will also be on their own, often personal, journeys on the road to recovery.

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WHERE THE HEART IS
THE CENTRE OF CUSTOMER EXPERIENCE

Aptean

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Antony Jagger, Manager, Customer Solutions, Aptean, looks at some of the challenges associated with mobilising customer services teams in the financial services sector, and asks: “is a home working model sustainable in the long term”?

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BRIDGE THE GAP
THE MORTGAGE MARKET NEEDS TO UP ITS AUTOMATION GAME

Equiniti Credit Services

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Richard Carter, Managing Director of Equiniti Credit Services, explores how adopting open technologies can help mortgage providers accelerate their digital transformation, improve customer services and boost their recovery in a post-COVID-19 world.

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SILOED STRANDS
COMPLIANCE AFTER COVID, THE END OF BPU?

ComplyWithMe

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Have you heard of the BPU before? It stands for Business Prevention Unit, and it’s how the compliance function is seen in far too many organisations. I’m a consumer credit compliance consultant, an interim, usually. One of those people who breezes into a firm, changes everything and then goes on to the next contract, leaving someone else to carry on. I specialise in operational compliance, complaints, Quality Assurance (QA), policies, procedures etc. I think of it as Operations Assurance and I’d like to share a few insights with you.

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CLEAR BENEFITS
MAKING THE INVISIBLE, VISIBLE

Experian

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Meet the mainstream financial system, because there is little or no information available on their financial track record.

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A TIDY SHIP
FCA COMPLIANCE

Product Partnerships

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The Financial Conduct Authority (FCA) continues to focus on sales practices in the motor sector, and has highlighted throughout this year the need for those involved in the financing of motor vehicles, to ensure customers can make an informed decision. 

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OPEN BANKING
THREE MYTHS

Credit Kudos

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Open Banking launched in the UK back in January 2018. No one disputes that the initiative opens up a host of valuable opportunities for those operating in the financial services sector. However, well over a year since its launch, many lenders are hesitant to exploit the opportunities that Open Banking presents, often due to false or outdated concerns.

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