On 31 July, the FCA introduced new regulations under the Consumer Duty Act to ensure companies are offering a fair deal to their customers.
The regulator has since set out a 14-point plan to ensure banks appropriately pass on interest rate rises to customers and communicate clearly on savings deals.
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In what has been termed the biggest overhaul in decades of finance industry regulation, fintech companies are exploring ways financial service providers can best manage the new regulations.
Jonathan Barrett, CEO and co-founder at reg tech provider, Comentis, said: “Customer vulnerability is the thread that runs through all aspects of the Duty. Now is the time for firms to sit up and make sure they are supporting their vulnerable clients.
Any business which offers credit to pay for their goods and services is going to be affected. Therefore, whether a consumer is buying a car, a pair of glasses or a sofa if the consumer takes a credit agreement, the firm the consumer purchases from will need to understand if that customer is vulnerable under FCA definition. This poses a massive challenge for industries that have previously passed on such responsibility to a credit provider. Consumer Duty now needs to be adopted across the whole distribution chain.”
“The deadline today should be seen as the firing of a starting pistol, marking the beginning of a broader conversation, and understanding on vulnerability. While some might have been looking forward to putting Consumer Duty behind them this summer, the reality is that the topic of vulnerability is here to stay.”
iVendi, a provider of automotive technology, said the Duty has been incorporated across its Connected Retailing platform – used for selling motor finance both online and in the showroom – to meet FCA aims of ensuring customers are provided with products that meet their needs and offer fair value.
Rob Severs, senior vice president of products and insight, said: “In May, we revealed details of the new five-step approach – lender-specific data, lender product videos, suitability assessments, signposting and interceptions – through which we would enable Consumer Duty compliance for dealers.
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By GlobalData“The new journey we’re launching now, introduced across our product range, is very much that theory made practice.
Severs said: “With Consumer Duty now in effect following the end of July deadline, there is considerable interest in these new products from dealers who recognise that digitalising the motor finance journey is really the only viable route through which to deliver the processes and management information that make compliance practical.”
