MOTOR finance, as with every other area of financial services in the UK, has gone live with the FCA’s Consumer Duty and MotoNovo Finance’s Commercial Sales Director, Debbie McKay, is keen to stress that this is just the start of the race, not the end.
She said: “The F&I community has been working diligently for many months and, in some cases, years to get ready for the launch of the Consumer Duty. Now we are there; arguably, the harder work begins; all firms, including dealers and broker firms, must be able to evidence that customers are now truly at the heart of their businesses. As the regulator has said consistently, it is a significant shift in our expectations of firms.”
The FCA ensured fresh focus was placed on motor finance providers’ Chief Executives on March 1st. The regulator reminded firms of the implementation timeline, key elements of the Duty, how it applied to motor finance firms and their expectations for embedding the Duty. It is this embedding of the Duty McKay is keen to stress.
“Now is the time for all of us to step back and challenge ourselves. Have we made the substantive requirements expected, and what plans have we got for continuous improvement and monitoring?”
Not only has the regulator been explicit in its expectations for positive change from all firms, regardless of size, acting ‘swiftly and assertively where it finds evidence of harm or risk of harm to consumers,’ it is a message that will result in increased media attention and scrutiny following the Consumer Duty launch. It is something that has already seen momentum building. On July 24th, the Daily Mirror published a story about the launch under the heading, “New rules to stop customers being ripped off coming next week.”
In seeking to embed the Consumer Duty, McKay said dealer leaders to ask themselves five questions:
- What has changed in how you promote, sell and provide F&I services to improve customer outcomes?
- How are you measuring it?
- What have you done to identify and support vulnerable customers?
- What steps have been taken to ensure affordability?
- How have you placed customer needs at the heart of your business?
She added: “It is not an exhaustive checklist, but I hope it ensures that delivering on the Consumer Duty is a continuing priority because I do not doubt that the outcomes expected will remain a moving target.”
Meanwhile, a new Consumer Duty customer journey has been launched by iVendi that has been immediately incorporated across all the motor retail technology specialist’s dealer product range.
The changes have been made to its core 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.
A comprehensive Consumer Duty process now covers the points from initial motor finance quote results through to the final application submission, with new pages added including lender product content, lender product understanding questions, lender privacy policies and finance product understanding questions.
Rob Severs, senior vice president 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. The new journey we’re launching now, introduced across our product range, is very much that theory made practice.
“These enhancements are designed to provide dealers with the very best means and opportunity of explaining motor finance products and services to customers. They illustrate the price and value of what is being offered, ensure the car buyer has a good understanding and show how they will be supported by the lender.
“Our process ensures lenders are introducing products correctly and consistently, while managing the task of digitising and automating lender introducer packs within the motor finance journey. Especially, it aims to help protect vulnerable customers through emphasising lender support and signposting additional resources.
“Getting all of these elements right is essential to satisfying the FCA’s requirements – you could call them ‘Consumer Duty 101’ – and these changes should make compliance as straightforward as possible for our more than 8,000 platform users.”
The enhancements to the Connected Retailing platform are the latest step in the company’s strategy designed to help dealers meet the new compliance demands. Last month, three new Consumer Duty product bundles were introduced that also include the new customer motor finance journey.
Consumer Duty Lite includes a finance calculator, online finance eligibility checking, multi-lender quoting and submission, FCA and commission disclosure status, lender-specific product information, lender product videos, product suitability assessments, support services signposting for vulnerable customers, customer credit rating, stock engine, customer self-serve, online finance applications, application interceptions and comprehensive management information. Classic adds iVendi’s Digital Deal, enabling dealers to quickly create a finance proposition for each customer, while Ultimate features showroom finance eligibility checking and online vehicle reservations.
Rob 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
