The firm said that the tool will assist firms in identifying borrower vulnerabilities early in the process, and help highlight underserved areas within lending policy and the wider market.
Broker subscribers to Knowledge Bank will be alerted that additional questions or care may be needed with specific cases which are relevant to the Consumer Duty, and this will be highlighted on the broker’s ‘evidence of research’ document for their compliance file.
This will be replicated for sales and underwriting teams at lenders who use Knowledge Bank, to demonstrate that they are taking the time to identify and support vulnerable customers.
Vulnerability is a key challenge
Nicola Firth, CEO of Knowledge Bank, argued that identifying vulnerability was one of the most challenging aspects of the Consumer Duty, as it was open to interpretation and not confined to singular types of borrowers.
She added: “Because of the unique way in which Knowledge Bank handles lender’s policy we are able to denote which of these may indicate a vulnerable situation for the customer which is either permanent or temporary. Using this information, lenders and brokers can consider their appropriate response to meet the standards required.”
Firth noted that the firm had worked closely with its partners across the industry to get a better grasp of what tools were needed to ensure that the new rules were as easy to navigate as possible.
“The clock is ticking on Consumer Duty coming into force and so we have worked hard to have the tools in place now so that both brokers and lenders are well served and provided for. This early delivery also allows lenders especially to hit the end of April deadline to have in place what they need ready for July,” she concluded.
The tool launch comes after the FCA cautioned that some firms are ‘over-confident’ that their existing practices are adequate for Consumer Duty, while around half of brokers feel ‘somewhat’ prepared for the new regime.
