Lenders scramble to meet Consumer Duty deadline, 61% seek external expertise

Lenders scramble to meet Consumer Duty deadline, 61% seek external expertise

As the deadline for the Financial Conduct Authority (FCA)’s Consumer Duty approaches, a startling 67% of lenders report feeling unsupported by the FCA.

To address this issue, AI-powered transaction analytics firm Fuse has launched Health Signals, a product designed to help lenders meet new compliance requirements. Health Signals measures financial vulnerability, predicts arrears risk, and monitors the impact of financial products on borrowers.

The lack of preparedness among lenders is evident, with 55% admitting they are unprepared for the upcoming Consumer Duty. Additionally, 61% plan to turn to third parties for support and guidance. Health Signals aims to fill this gap by automating vulnerability monitoring through the analysis of customer transaction data, empowering lenders to proactively monitor, report, and predict financial vulnerability.

Health Signals assigns a Vulnerability Score to customers based on their level of vulnerability and likelihood to enter financial harm. This score enables firms to prioritize support for those most in need of intervention. With nearly a third of lenders (32%) reporting an increase in customers defaulting on their payments in the last 12 months, this feature is particularly timely and useful.

The FCA’s Consumer Duty, set to come into force at the end of July 2023, requires firms to ensure good customer outcomes and to understand and evidence whether those outcomes are being met. The introduction of Health Signals helps financial institutions comply with the new regulation and monitor the impact of financial products on consumers.

Fuse CEO and Co-Founder Sho Sugihara said, “Health Signals offers unique insights into consumer vulnerability, providing firms with the tools needed to better understand their customers and boost consumer protection.” Developed in collaboration with some of the UK’s most recognisable banks, Health Signals represents a future of global finance focused on unparalleled consumer protections and a fairer financial system for millions across the UK.

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