As part of the service, the consultancy assesses affordability methodologies, data sources and controls and benchmarks the approach against peers and regulatory expectations.
Lenders will receive a concise Affordability Health Check Report with prioritised recommendations, a practical improvement roadmap and indicative implementation costs and support options.
The service is suitable for lenders across the motor finance, consumer lending, credit union, specialist finance and buy now, pay later (BNPL) sectors. It aims to improve outcomes and streamline operational efficiency and comes as focus on affordability outcomes and Consumer Duty increases.
At the same time, evolving affordability data and verification techniques will help lenders to take a more bespoke approach to assessments.
Harry Charalambous, principal in the banking and credit advisory division at Broadstone, said: “Affordability assessments are a critical part of responsible lending, but many firms are working with frameworks that have evolved incrementally and may no longer reflect current regulatory expectations, or take advantage of the latest tools, techniques and analytical approaches.
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“With Consumer Duty increasing the focus on customer outcomes, lenders need to be confident that their approach is robust as well as being supported by effective governance and controls.
“Advances in data and verification techniques provide an opportunity to make assessments more accurate and tailored to individual circumstances.”
