News - Page 6 of 14 - Kind Consultancy

Final FCA Findings on Motor Finance: Cause for concern?

6 March 2019

The publication of the FCA’s final findings on motor finance has raised alarm bells across the industry this week. Their research shows that some consumers have been overcharged by more than £1000 when taking out loans to buy cars. The FCA has suggested that a key problem is commission models which allow brokers to set customer’s interest rates in order to earn higher commission for themselves. This is especially prevalent in Personal Contract Purchases, which now make up roughly 80% of all new car finance deals, and see the customer renting their car over three or four years.

The Finance and Leasing Association claims that the FCA’s final findings on motor finance are “based largely on out-of-date information” and don’t reflect “the very considerable progress that the market has already made in moving away” from these problematic commission models, but have also said that they “look forward to working with the FCA as it modernises its regulations”. The FCA is still considering options for intervening in the motor finance market, with the possibility of strengthening current rules, banning commission models that are open to abuse and limiting broker discretion in regards to setting interest rates all being discussed at the moment.

At Kind’s own Motor Finance roundtable in December 2018, the oversight of brokers and dealers was a central topic throughout discussions. We’re now looking forward to deliberating over the final findings at our next event, which will be held in April.

Given the wide scope of the key areas involved (oversight of dealers and brokers, affordability assessments, policies/procedures/systems & controls, clear and not misleading information) all firms will need to review their current practices. A good way to start would be by way of a gap analysis and Kind Consultancy have experienced motor finance consults who will be able to support you in the initial stages and beyond. Contact Selena Tye on 01216432100 or e-mail selena@kindconsultancy.com for a confidential discussion of your organisation’s needs and how we can help.

Selena Tye

This post is part of a series from Selena on Motor Finance – catch all the entries here.

Governance, Risk & Compliance: This Year’s Big Topics?

11 February 2019

In the first few months of the year, there’s always a lot of prognostication in the Governance, Risk & Compliance world about what the year’s big Compliance issues will be. The biggest changes are always ones we don’t see coming and don’t already have a plan for, but here are a few of the trends I think we’ll be talking about across 2019.

With the FinTech world continuing to expand at an explosive rate, we’re going to see a lot of businesses looking to automate as much of their AML and KYC process as possible to keep up with their increasing user bases. The businesses that can get automatic on-boarding systems in place that are easy to use for their customers, as well as efficient and accurate for themselves, will have a huge advantage over their competitors.

More generally, technology will continue to be at the frontline of AML – in the FCA’s financial crime report, almost all of the types of frauds that top firms reported as being most prevalent last year were tech-based, including Vishing, Malware, Hacking and Account Takeovers.

Cryptocurrency is still controversial in the finance world, with some believing it’s the future of the industry and others seeing it as a pipe dream that will never fulfil its promise. For now, though, no one can deny that there is an increasing amount of activity involving crypto, and 2019 will see many governments introduce formal regulation around the technology, with the international intergovernmental organisation FATF planning to release a set of AML standards covering cryptocurrency in June.

Just this month we’ve seen a situation showing how unprepared traditional regulation is for some unique aspects of cryptocurrency with the death of QuadrigaCX’s CEO resulting in users of their exchange losing access to millions of pounds worth of bitcoin. At the time of writing it’s unclear if their customers will ever get their money back, a situation which would be unthinkable for a bank or building society. As crypto continues to try to move away from its controversial early image, it will be interesting to see how the sector reacts to efforts that aim to bring it more in line with traditional finance.

Kind Consultancy maintains a database of industry-leading Governance, Risk & Compliance professionals who are ready to join your organisation in permanent or contract positions to help keep your GRC strategy efficient and up to date. Contact us on 121 643 2100 or e-mail info@kindconsultancy.com for a discussion of how we can help.

Change Management : Make or Break

3 January 2019

As we enter 2019, a number of changes lie ahead for the financial services sector. There’s the long-awaited Motor Finance paper, the end of PPI, Retail Distribution Review (RDR) on Financial Advice, Claims Management Companies (CMC) Authorisation, Senior Managers Certification Regime (SMCR) within Consumer Credit and over the last couple of days, the FCA’s probe into cryptocurrency transactions. These are just a few of the areas of regulatory focus, all of which will result in industry change in some form.

In its 2018/19 business plan, the FCA is very clear on its expectations on firms’ culture and governance across all sectors. The key is being able to demonstrate that compliant, positive behaviours are being driven to ensure that consumers benefit from the right outcomes.

Below our Change Consultant, Tony Jobson, shares his insight on change, how preparation and prioritisation can support your business throughout change, big or small.

“So, what is it about Change?

This simple word can create a whole range of emotions in us. Excitement, fear, apprehension, denial – all can appear and disappear in moments or become barriers for us as we move forward.

When we think about Change it is often in the context of physically doing something differently; moving to a new house, getting married or divorced, starting a new job, being made redundant or changing career direction. Change can be directly related to us as individuals, impacting on our lives and the way we do things. We may instigate the change, or more often, it is as a result of decisions made way beyond our control.

World politics, the turbulence of economics, natural events – being in the wrong or right place at the wrong or right time – we sometimes have no say in how a particular piece of change begins or how it develops. What we can have some control over is how we understand, react and embrace or reject the different circumstances we find ourselves in. Of course, in history, there are countless examples of people doing extraordinary things in extraordinary situations, which draw awe and admiration from observers.

However, I’m more interested in ‘ordinary change for ordinary people’. Back in the day, asking someone to move desks or maybe offices were major events. Today, as technology frequently becomes a common part of the workplace, we still have those internal feelings. How we understand and deal with our reactions is something we can do something about – we just sometimes need a little help, or more importantly some space to think and breathe!

How often do we hear about a change in process going wrong? A new system being introduced and the time needed to be invested afterwards to ‘correct’ the way of working? Training in new regulations that becomes a battle of wills rather than a smooth transition? Or increasing productivity but destroying colleague engagement along the way?

My submission is that these scenarios play out all too often.”

How can Kind Consultancy help?

Looking carefully at how we prepare people for forthcoming change events can make or break a team, business or industry. At the very least it can stall progress. Consider Brexit … with just three months to go – the apparent lack of planning, conflicting personal and political agendas together with ill-judged negotiating has led to paralysis in the boardroom, investment in industry drying up and near-panic for companies who trade with European neighbours. Sound familiar? It’s a classic Change case study!

Kind Consultancy has been supporting organisations in Governance, Risk and Compliance for the last 6 years, with access to experienced individuals who have been part of the of the change revolution and have been involved in successful and unsuccessful change programmes. This experience coupled with a unique approach to the People Side of Change allows them to help leaders, teams and individuals on their own change journey.

Typically, our consultants will look at key aspects of a business, such as culture, leadership, reward & recognition. This flexible framework can guide business leaders of all levels on a path of prioritisation, coupled with individual and team discussions, coaching and mentoring sessions, best actions can be agreed to achieve business objectives.

For more information on how Kind Consultancy can support you, please email info@kindconsultancy or call on 0121 643 2100.

More Focus On General Insurance Regulation?

7 November 2018

At the end of last month, the FCA fined Liberty Mutual Insurance Europe SE over £5 million for failures in their oversight of mobile phone insurance claims and complaints handling processes administered through a third party. Liberty held regulatory responsibility for ensuring claims and complaints from customers were handled fairly. In the 2018/2019 FCA Business Plan, third-party outsource was named as a key area for review and this is the most high profile case involving it so far this year. The Business Plan states that they’re concerned about the ever-growing number of authorised firms outsourcing crucial procedures to unregulated third-parties, and the FCA are looking to re-enforce the fact that firms will be held responsible for the failings of anyone they subcontract compliance or complaints work to.

This is also the latest FCA case focussing on a general Insurer, another area the regulator has been giving greater focus to recently. The scope of Insurance regulation could expand further in the near future with the FCA currently running a probe on car and home insurance pricing and transparency around renewals. Adding to the FCA’s wider work on “loyalty penalties” and the cross-industry problem of long-time customers sometimes getting worse deals than new ones, we’re looking at a lot of potential issues that could create new KYC problems for the industry, for example; where customers are looking for credit to pay for their insurance premiums, affordability checks could prevent them from renewing with their preferred insurer. In addition to this, the Senior Managers and Certification Regime (SMCR) will be applied to General Insurance from December, creating a whole new set of responsibilities, fitness and propriety testing requirements for senior management across the sector.

Kind Consultancy is currently having discussions with a number of insurers regarding review of their practices, processes and procedures. If you need experienced, knowledgeable compliance and complaints contractors, we have a pre-qualified bank of industry-leading interim talent who can quickly and efficiently join our clients to support current and future projects relating to these issues. For a confidential conversation about your regulatory needs, contacts selena@kindconsultancy.com or call 0121 643 2100.

– Selena Tye

Kind Consultancy Announces Major International Project – Bringing Market-Leading Risk & Compliance Talent to Australia

6 November 2018

Kind Consultancy is very proud to announce the commencement of a major international project in partnership with a Big Four consultancy. We’re looking for Manager, Associate Director and Director-Level Consulting professionals in the UK with experience of Enterprise Risk Management and the design and implementation of risk frameworks, who are interested in relocating to Australia. We are also interested to hear from Regulatory Advice specialists at Manager through to Director level.

Our client is committed to getting the very best talent for these crucial roles and as such is willing to support visas and assist with relocation costs. The roles will be based in Sydney and Melbourne and will focus primarily on Financial Services projects, with some possible work in local government as well.

Kind Consultancy Director, Lynsey Moore says that this project “represents a truly life-changing opportunity for the very best Risk & Compliance professionals to do exciting work in one of the most desirable locations in the world”

If you match the above description and you’re interested in relocating to Australia to join one of the global leaders in Risk and Compliance consulting, submit an up-to-date CV to info@kindconsultancy.com with the subject line ‘Australia Project’.

Kind Sponsors Cancer Research Wolves

11 September 2018

Kind Consultancy and Kind Wealth are very proud to have sponsored the Cancer Research Wolves for the last two seasons. The Cancer Research Wolves are a Rugby 7s team created to raise awareness and money on behalf of cancer charities. Fielding both men’s and women’s teams, the Cancer they have raised over £22000 over the last two seasons and we’re very happy to have been a part of that amazing success. Rugby 7s is a form of Rugby Union that sees seven-a-side teams competing in explosive seven-minute halves, making for an entertaining, action-packed sport that has become more and more popular over the last few years. Congratulations to all of the team, the coaches and their loyal supporters for all the work they’ve done for a very important cause.

Insurers to Review Commitment to Loyal Customers

29 August 2018

In all types of Financial Services products, one of the complaints you hear most frequently is that you have to frequently switch providers to get the best deal, by taking advantage of special rates and offers that are only available to new customers. The insurance sector is currently facing particular criticism on this front, with a new Which? investigation this week finding that customers with combined policies owned for longer than a year were paying on average 38% more than new customers. The results only get more concerning over time, with policies that were four to six years old found to be 54% more expensive compared to prices paid by new customers.

Earlier this year, the Association of British Insurers and the British Insurance Brokers Association announced a list of “action points” aimed at tackling this problem, with an overall goal of “reducing excessive differences between premiums for new and existing customers”. Firms belonging to either of the two industry bodies will pledge to take preventative measures to ensure that loyal customers are not “unfairly penalised” at renewal time. They will also need to reassess the fairness of pricing strategies, with insurers reviewing their pricing for customers who have been with them for over five years.

The plan applies to home, motor and travel insurance, but so far pet and health insurance are not included. In a press release this morning ABI chairman Andy Briggs said “The renewal market simply doesn’t work where loyal customers get charged much more than new customers” and that “These new guiding principles and action points are a positive initiative by the ABI and BIBA… to demonstrate that the whole industry recognises this is an important issue that needs to be addressed”

The treatment of existing customers is also on the minds of regulators, with it highlighted as a key priority in the FCA’s 2018/19 Business Plan. The plan stated that they “aim to ensure that existing customers enjoy the benefits of increased competition and innovation” and that “firms should not give longstanding customers less attention than new customers or treat them in a way which results in poorer outcomes.” They did note that many firms have made progress on centring existing customers in their business models, and while there has definitely been a growing recognition of this issue in the industry over the last decade, there’s still a long way to go. Hopefully, with these new ABI/BIBA plans, the insurance sector can lead the way in prioritising and rewarding longstanding loyal customers.

Expert Recruiters and The Kind Difference

23 August 2018

Kind Consultancy prides itself on being a specialist firm of expert recruiters. But what does that mean? How are we different from the average recruitment agency?

When a new recruiter joins a firm, they’re often plunged into a few days of intensive training, memorising scripts and going through role-play exercises until they have a handle on how they’re going to be working. Some recruitment agencies go one step above this with continuous training, regularly refreshing consultants to keep their skills sharp. People will then go to market claiming to be “experts” when in reality they have a shallow understanding of the roles they’re working on that doesn’t go much further than a job title.

We believe it’s important to not just understand recruitment processes, from initial client briefs through market mapping to interviews, completion and post placement care, but also to aide our consultants and, subsequently, clients and candidates with specialised, specific Governance, Risk & Compliance and Complaints industry knowledge.

The Kind Difference is that as well as equipping our team of recruiters with a variety of techniques to make them excellent recruiters and making sure they’re continually honing their abilities, we also regularly train the team on industry topics and specific role knowledge – just this month, for example, they’ve completed Financial Crime and AML regulation training, as well as Treating Customers Fairly. As well as this formal training, Kind Consultancy works alongside the other parts of the Kind Group who are themselves Financial Services organisations regulated by the FCA, exposing us to regulatory changes and upcoming topics on a daily basis.

This means that unlike any of our competitors when you talk to a Kind consultant you’re talking to someone who actually understands your role, how it works and how it relates to the rest of the business. As a client, you can be confident that your role will be approached strategically, with candidates selected who fit your organisation’s specific role needs and wider business plans. As a candidate, you know you won’t be wasting time explaining every acronym on your CV or being submitted to jobs that are only loosely related to your experience and skill set.

The next time you encounter a recruiter self-describing as an “expert” in your field, ask – what makes you an expert? What exposure to the actual industry have you had?

If you’re seeking career advancement within Governance, Risk & Compliance or Complaints, or your organisation has resourcing needs, contact us at Kind on 01216432100 or info@kindconsultancy.com for a confidential discussion.

Regulator Calls for Simplified Pension Choices

10 July 2018

Do customers need simpler pension choices? Last month’s Retirement Outcomes Review saw the FCA calling on providers to simplify retirement choices, improve customer engagements and most interestingly to establish drawdown “investment pathways”.

The FCA suggests that these pathways would be ready-made options, designed to enable consumers to either take the money over a short period, take money as an income in retirement or stay invested for a longer period of time with only occasional withdrawals. Three years on from the pension freedom reforms that made many of the current invest-and-drawdown schemes possible, the FCA is concerned about the value for money in drawdown, especially the significant variance in charges which are sometimes complex and difficult to compare. The FCA plans to force firms to show a straightforward one-year charge figure in pounds and pence in the key features illustration they provide customers. They also made it clear that they have “not ruled out” bringing in a cap on drawdown charges and hinted that this might be used against firms that don’t introduce investment pathways.

The FCA’s research shows one-third of drawdown consumers 100% invested in cash, and they believe half of those are likely to suffer on income in retirement. The new rules would force consumers to take an active choice before being placed into cash. They also found that as many as 60% of consumers had not taken any advice about drawdown and were not sure about where their money was invested and that customers could be receiving up to 37% more retirement income by investing in a different mix of financial assets rather than cash.

If this creates a new area for customer complaints or remediation, Kind Consultancy is perfectly positioned to supply you with both interim and permanent resources with extensive experience and expert-level knowledge in this area. Contact us on 0121 643 2100 or e-mail selena@kindconsultancy.com.

Selena Tye

Building Societies and the Future of Retail Banking

28 June 2018

For those following Financial news over the last few months, it can seem like quite a dark time for Building Societies, retail banking and the mortgage space, with a lot of doom and gloom surrounding “mortgage prisoners”, affordability rules and the possibility of an apparently impending interest-only mortgage time-bomb. There’s a sense of panic amongst some customers, who fear raising the issue with their provider, thinking perhaps they’ll be asked to pay immediately and be in an even worse situation.

Personally, I believe that this is a very exciting time of great opportunity for Building Societies to really show why they can be a fantastic alternative to traditional big banks for some customers. Speaking at the Building Societies Annual Conference last month, the FCA’s Director of Supervision (Retail & Authorisations) Jonathan Davidson spoke about Building Societies being perfectly positioned to provide unique solutions to consumers. Of course, the ability to provide complex products needs to be balanced with a strong understanding of the complex risks that come with it, and affordability and lending risk considerations will continue to be crucial for organisations of all sizes. We’re already seeing some unique responses to recent issues from the Building Society markets, with a number of them announcing, for example, Retirement Interest Only Mortgages, a product very specifically designed to help their customers avoid these problems, and YBS announcing that they’re completely abandoning “Early Redemption Charges”.

Mark Marsden of Beverley Building Society commented that: ‘Our individual manual underwriting processes specifically provide for helping ‘mortgage prisoners’ access all our competitive mortgage schemes and we consider doing so to be an important contribution to our social purpose of helping support sustainable homeownership’. Beverley has also recently broadened the availability of interest-only lending to older borrowers (including those in retirement) and will be launching a Retirement Interest-Only product later in the year.

Mark welcomed the FCA’s initiative in this area commenting that ‘in normalising the provision of these types of loans the regulator has greatly assisted lenders to accelerate product development by reducing uncertainty around the interpretation of the associated conduct risks and ensuring minimum standards of protection for customers. Retirement Interest-Only mortgages will not be suitable for everyone, but can satisfy existing and emerging needs in a very cost-effective way’.

If your organisation needs Regulatory Compliance expertise, contact Kind Consultancy on 01216432100 or e-mail selena@kindconsultancy.com