THIS month’s FCA deadline signals the start of a three month “pressure cooker” period for leasing companies and dealers as they move to comply with Consumer Duty.
James Tew, Chief Executive at the motor retail technology business iVendi said that April 30 is the deadline date when providers of finance products would issue reviews of their existing products, giving just a few weeks before the regulations take effect.
“Businesses will receive product review information from all of the lenders with which they currently partner by the end of this month and then only have until July 31 to integrate the findings into their businesses.
“It’s a compressed timeline and is going to create something of a pressure cooker three months for dealers. These reviews are likely to be detailed and will need to be incorporated into procedures and fully explained in training.
“For example, where a review of a product details factors such as the target customer, as well as identifying vulnerable customers, the businesses will need to build the findings into their systems as well as ensuring that staff fully understand them. The same principle applies to all the contents of the reviews across all regulated finance and insurance products.”
Tew said that a key point is going to be to decide whether to use digital or manual systems to ensure that Consumer Duty was being met. “Systems need to ensure not only that the relevant points highlighted in the product reviews are followed but that processes are tracked and recorded in a manner that is auditable and makes them available for review.
“This can be done using manual, paper-based systems but, in the real world digital processes are simply much, much better at this kind of job and we have already been working with many of our customers to ensure they are prepared for this moment.”
He added that the July 31 deadline did not mean that businesses could then take a break because the process of reviewing outcomes and making changes designed to bring about improvements would then begin.
“In many circumstances, dealers have historically siloed compliance and served all the core regulatory requirements in one go. This is often done post-application. Our interpretation of Consumer Duty means that this should no longer be the case. Positioning the right product to the right customer should be carried out pre-application, something that iVendi has done for many years but is further enhanced with the new regulations.”
