Forging a fairer way forward after the FCA’s ‘Dear CEO’ letter to Retail Lenders

Written on
byChisimdi Nzotta

The rising cost of living has led to lending firms facing an increasing number of vulnerable customers, as more borrowers struggle with their personal finance. Consumers are experiencing growing financial pressure leading to a rise in debt and fuel poverty. According to the Office of National Statistics, 88% of adults in Great Britain reported their cost of living had risen over the past month.  

 

The Financial Conduct Authority (FCA) has raised the level of urgency, writing a ‘Dear CEO’ letter to retail lenders warning that they are not doing enough to support vulnerable customers and urging them to meet their standards to support borrowers. They have called lenders to identify customers in an unfavourable financial situation, tailor services to meet their individual needs, make money and debt advice free and more accessible, and essentially, give vulnerable consumers better support. 

 

To comply with the FCA, lenders must have an ongoing, effective process to identify vulnerable customers, understand the best way to support them, and provide good outcomes. They have to feature complaints into product and services development and tailor forbearance to customers’ individual circumstances. It is unclear how companies will achieve this without employing some form of technology. Speech-drive AI platforms have become a critical regulatory tool for firms to offer consumers services tailored to their individual needs, support requirements, and show evidence of good outcomes. 

 

Platforms like Aveni Detect meet firms’ growing compliance needs by using machine learning and natural language processing to magnify teams’ reach and understanding of customer outcomes. Adopting its speech analytics solution can significantly increase monitoring coverage, identification of vulnerable customers, and oversight of sustainability of products and services. With the capacity to monitor and analyse 100% of consumer interactions, speech analytics can flag high-risk calls and provide insight to improve the effectiveness of quality assurance processes and comprehensively support vulnerable customers across all aspects of their journey. In addition, it enables firms to uncover the data they need to drive improvements in action, behaviours, policies, and processes. 

 

The FCA’s ‘Dear CEO’ letter also outlined that lenders aren’t ensuring they have well-trained staff capable of having complex conversations with customers in financial difficulty. Aveni Detect can assess agent performance from all calls handled and provide timely insights. It provides direct feedback on how agents handle vulnerable customers, and flags situations that do not follow company standards or show non-adherence to mandatory scripts for more personalised coaching opportunities. 

 

Turning away from old, unreliable, manual practices and adopting speech analytics solutions like Aveni Detect is the way forward for lending firms to support vulnerable customers individually and avoid regulatory sanctions by the FCA. With the deadline almost here, there’s barely room for delay.

 

Aveni CEO and Consumer Duty expert, Joseph Twigg, held a free webinar on Tuesday 5th July, 12:00 – 12:45, where he answered these questions and provided insight into what the ‘Dear CEO’ letter means for companies in practical terms. Download webinar recording here!

 

Consumer duty webinar Joseph Twigg

 

Other recent posts

CRO Consumer Duty survey findings: Customers at the heart of your business? Now is the time to prove it.

CRO Consumer Duty survey findings: Customers at the heart of your business? Now is the time to prove it.

We surveyed +80 Senior Compliance and Risk Officers from across the UK’s Financial Services sector to find out their top priorities and investment plans for Consumer Duty and how they’ll meet the tightening data-driven...

Aveni’s end of the year Reunion!

Aveni's end of the year Reunion!

Aveni works at the forefront of innovation in AI and Natural Language Processing, providing quality assurance and regulatory compliance solutions for financial services and utilities companies in the UK. However, that’s not all we...

Adoption of machine learning and data driven technologies at the heart of human centred advice

Adoption of machine learning and data driven technologies at the heart of human centred advice

This is an excerpt from our Human+ whitepaper. Download here for full details about how data driven technologies can power human centred advice.   The recent acceleration in digitisation of financial advice combined with advances...

executive understanding ai

AI: Why an executive understanding is so important’  - 5 key takeaways from Aveni Labs webinar

Data-driven technologies underpinned by rapidly evolving AI, are set to be placed at the heart of firms’ operating models. It emphasises the need for Financial Services Executives to have a clear understanding of AI,...

Record calls consumer duty

The FCA emphasises the importance of recording customer calls to meet Consumer Duty requirements

In the FCA’s recent Consumer Duty Retail Lending webinar, Jonathan Phelan, Head of Department, Consumer Finance at the FCA urged firms to record customer interactions as a critical step in being able to monitor...

financial advice data capturing

Driving Automation in the Financial Advice Industry with Data Capturing

The present day financial advice industry has seen little innovation since the turn of the last decade, but is now entering a period where it will be fundamentally disrupted.    The industry has relied...

Colin Clark Aveni Chairman

Investment heavyweight Colin Clark appointed as chair of AI fintech business Aveni

Aveni.ai has appointed investment heavyweight Colin Clark as Chairman of its newly formed Board. The strategic appointment comes in the wake of a recent successful funding injection of £2.75 million to grow market share...

financial services space

Aveni's busy week: FinTech Award Win, HomeGame 2 and JP Morgan Innovation Events!

Last week was a busy one for Aveni. From winning a Scottish Financial Technology award to being a part of two exciting and impactful events with JP Morgan and the langcat, we loved getting...

Impact of AI

Human+: Human-in-the-Loop AI

AI is already changing our lives; from expert systems which predict the weather and the stock market, to facial recognition and internet search results. Its application is growing more extensive. Some uses of AI...