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Two thirds of lenders are not yet compliant with Consumer Duty – Moneyhub
Two thirds of banks and building societies are not yet Consumer Duty compliant, as a minority of senior decisionmakers worry they will miss the deadline to meet standards laid out by incoming rules.
Two in 10 leaders at lenders said they are unlikely to be compliant come April, according to a survey by open finance platform Moneyhub.
Almost nine in 10 senior decisionmakers agree the new regulation from the Financial Conduct Authority (FCA) will have a significant impact on how they do business.
However, one in 10 senior decisionmakers said they didn’t know anything about the new regulations, with four per cent only informed through the survey itself.
When asked what was the most challenging aspect of this new regulation, a third said that ensuring communications equip consumers to make effective and timely decisions about their finances.
A quarter said offering specialised products and services that met the needs of the customer would be the most challenging and the same proportion said offering customer support that met the needs of the consumer.
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More than half said they’d be investing in technology to develop and deliver more personalised and targeted communications.
‘Consumer Duty more than box ticking’
Samantha Seaton, chief executive of Moneyhub, said: “Consumer Duty is so much more than a box-ticking exercise.
“Inflation, ease of accessing credit, rocketing cost of borrowing, and our move towards a cashless society all have a massive impact on the financial resilience of people.
“Finances for most are incredibly confusing and stressful. Most of us no longer physically interact with money, which is also adding to the confusion and stress about managing money.
“With Consumer Duty the responsibility shifts from the consumer to us, the financial services industry, and in particular the product providers. When it comes to consumers’ finances, we as an industry are in a position of strength because we do know how money works, however we will only get this right if we have an aggregate view of the customer.
“Open Finance solves this challenge. With Open Finance you get an aggregate financial view of the consumer and with their explicit permission. This means Open Finance enables banks and building societies to have a true understanding of their customer and be able to prevent any foreseeable financial harm, one of the key cross-cutting rules of Consumer Duty.”