Compliance is an extremely important part of the loan industry with it’s key aim to protect customers from both unscrupulous companies, and themselves. Compliance teams ensure lenders are focusing on providing a responsible service to customers, focusing on their needs – not just the business owners profits.
It’s the job of the compliance team to ensure guidelines presented by the regulators are met. This doesn’t just mean implementing a set of rules though, that would be too simple. The rules passed down by the regulators first need to be interpreted before they can implemented.
This interpretation of the rules is what can get confusing, although it remains an effective way of forcing financial companies to THINK about the impact of everything they do from the customers perspective. Which in the long run is a lot more effective than any sort of checklist. At the end of the day it comes down to customer outcomes:
There are six consumer outcomes that firms should strive to achieve to ensure fair treatment of customers. These remain core to what we expect of firms.
- Outcome 1: Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture.
- Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
- Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
- Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
- Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
- Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.
So, simplifying this further, is your business customer driven? If it’s not, then it may be worth re-thinking the model.
Actively misleading customers to make a quick buck is meant to be a thing of the past, however it does still happen, and when it does the FCA is often slow to act. We can only hope this will change for the better in the future.
« Back to Glossary Index