New Knowledge Bank tool will highlight potentially vulnerable customers
Knowledge Bank has launched a tool to help brokers and lenders meet incoming Consumer Duty standards around customer vulnerability.
The company said the tool will help identify any vulnerabilities a potential borrower may have, with Knowledge Bank subscribers prompted that extra care may be needed in certain cases. This is recorded on the brokers ‘evidence of research’ document as part of their compliance file.
Lenders will also have the ability to analyse the data to see the prevalence and frequency of searches in these categories and maintain a record of their responses.
This information will be available for sales and underwriting teams at lenders who use Knowledge Bank, to demonstrate that they are taking the time to identify and support vulnerable customers.
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The Financial Conduct Authority’s (FCA) consumer duty rules come into effect at the end of July 2023. “It will set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first,” the FCA said.
The ‘vulnerability’ element of the consumer duty is one of the most challenging aspects as it is open to a degree of interpretation and is not confined to a particular group or type of borrower, said Knowledge Bank chief executive Nicola Firth.
“Any borrower could potentially fall into the category of being ‘vulnerable’ and this tool will help filter results and expose the transient nature of vulnerability due to life events,” said Firth.
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“Because of the unique way in which Knowledge Bank handles lender’s policy we are able to denote which of these may indicate a vulnerable situation for the customer which is either permanent or temporary. Using this information, lenders and brokers can consider their appropriate response to meet the standards required.”
She said the company had worked closely with its lender, network and mortgage club partners to understand what tools they need to ensure that the new rules are made as easy as possible to navigate.
She said: “The clock is ticking on consumer duty coming into force and so we have worked hard to have the tools in place now so that both brokers and lenders are well served and provided for.”
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