This morning the FCA published its annual Sector Views, an assessment of the risks and potential harm to consumers across financial services markets. The report sets out what factors are driving harm, as well as considering how the harm may develop over time. In response to the publication of these Sector Views, Paul Dyer, Head of Regulatory Risk and Assurance at Huntswood and former deputy chief risk officer at the FCA, said: “It’s clear that credit providers and lenders continue to face scrutiny from regulators, media and the public. If firms are able to adapt quickly to these changes and pressures, the sector will no doubt see positive changes in the coming year including driving the potential for innovation, better consumer outcomes and improvements to the dynamics of competition. The current scrutiny upon High Cost Short Term Credit will mean that not all providers stay the distance and the market will change.
“Firms that don’t want to be left behind should immediately review their business models and pricing practices to ensure that they do not exploit vulnerable customers. Instead, lenders should look to treat customers appropriately and fairly, identifying those in challenging situations early and responding accordingly.
“CMC’s will continue to circle this sector post-PPI and they will likely turn their attention to consumers who may be paying for and receiving a poor value of service. Lenders should proactively look to strengthen resilience where there is known potential for harm in preparation for more assertive supervision work, such as debt advice and claims management.”