Consumer duty milestone approaches: Are P2P firms ready?

The next consumer duty milestone is approaching on 30 April, ahead of the implementation deadline on 31 July.

By the end of April, peer-to-peer lending platforms and other regulated financial services firms must be able to demonstrate to the regulator that they have “completed all the reviews necessary to meet the outcome rules for their existing open products and services so they can share with distributors to meet their obligations under the duty, and identify where changes need to be made.”

Read more: FCA: New consumer duty will affect authorisations

However, the general consensus seems to be that the fintech sector is ready for the new regime, with various reports stating that that advisers, P2P lenders and other financial institutions are already heeding the new regulation.

Recent research from Aviva found that advisers are in a “relaxed mood” about the upcoming deadline. 41 per cent of advisers told Aviva that they had already started their preparations for the consumer duty, while 26 per cent said they had not started but are clear about what they need to do, and 17 per cent said that they had no concerns about the upcoming rule.

Last month, a number of P2P lenders told Peer2Peer Finance News that many of the consumer duty policies are already embedded in their businesses, and they are therefore ready for the new deadlines.

So what do lenders need to be aware of before the 30 April milestone?

According to the Financial Conduct Authority (FCA), all regulated lenders should have completed the reviews necessary to meet the outcome rules for their existing open products and services.

If these reviews identify any blind spots in a company’s business model, they should be ready to implement any necessary changes as quickly as possible.

Read more: FCA’s Sheldon Mills heralds consumer duty as catalyst for innovation

All regulated firms should also have appointed a consumer duty champion who is responsible for monitoring compliance with the new rule.

Anecdotal evidence suggests that most P2P firms have already met these requirements, but that doesn’t mean that they can rest on their laurels. The FCA has indicated that it intends to take the new consumer duty extremely seriously, and the April deadline should therefore be seen as a soft launch before the law comes into full force at the end of July.