This issue marks my 24th issue as editor of this magazine, or my two-year anniversary, as you could say. Looking back at the first issue, the cover story was in reference to a look at the FCA authorisation process. This month, two years later, the cover story is…well it’s also on the authorisation process. How times have changed.
Speaking to the industry, and writing about the FCA in 2014, nobody really knew what to expect from the process, and this spread a lot of fear, especially around the idea that dealers could be forced out of the finance market. Everyone was expecting to need to put lot of work into getting authorised (and most had already put in a substantial amount of work), but how applying for a full or limited permission from the FCA would go was at that point an unknown.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Fast-forward two years, and there is still plenty of fear around the FCA, but lots of companies have now been through the process. Unfortunately, when Motor Finance surveyed lenders about their experiences with the application, the results were less than stellar.
There is a full analysis of the results on pages 18 and 19, but briefly put, we found different lenders reporting wildly different experiences. This inconsistency doesn’t bode well for a principles-based regulator.
Obviously the lenders themselves would have had an impact on the timings, a lender that had all its information ready and well documented should in theory have an easier time of it than a lender that isn’t prepared. However I suspect the majority of the lenders that reported difficulties would argue they had prepared. What’s more, numerous lenders reported being asked the same information repeatedly, which suggests plenty of the blame also lies at the feet of the FCA.
Thankfully the FCA has apparently been listening. At a recent LendIt conference in London, Christopher Woolard, director of strategy and competition at the FCA, spoke to P2P lenders and fintech companies about the process. While there was no apology about all the problems, or a promise of any specific improvements, the fact he felt compelled to talk about authorisation processes, two years after the FCA started moving companies on from interim permissions, suggests at least someone at the FCA is aware that businesses are taking authorisations seriously, and could do with some additional guidance.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn June there were also a series of commitments the FCA made to try and improve the situation. While they looked good, they again didn’t mention all of the problems surveys such as ours have revealed.
Of course, it would be remiss to paint an entirely negative picture. A number of our responders posted positive reviews of their experience applying for authorisation at the FCA, and some said it met their expectations. The problem is that these weren’t in the majority.
The fact is, even if the FCA was to improve authorisations, several thousands of firms will have already gone through it. For them, what is probably most important now is that the FCA learnt some valuable lessons about consumer credit over the past two years, and is able to use it to apply its principles to the market in a fair and reasonable manner.
Hopefully in another 24 issues I won’t still be writing about the FCA, and the regulator will be old hat, with exciting new products and developments instead being the larger draw.
A man can dream.
Jonathan Minter
jonathan.minter@uk.timetric.com
