More than half (55 per cent) of lenders are not prepared for the new consumer duty, just two months before the deadline for the new regulation.
According to a new report from AI powered transaction analytics firm Fuse, 61 per cent of lenders said that they will have to bring in a third party to provide compliance support and guidance.
More than two thirds (67 per cent) of lenders said that they don’t believe they have been given enough FCA support ahead of the introduction of the new rule.
“The UK financial system is in urgent need of systematic change if the financial health of consumers is to be at its heart,” said Sho Sugihara, chief executive and co-founder of Fuse.
“The consumer duty stands to be a powerful catalyst to kickstart this change, and it’s essential that banks and other financial institutions are well supported with the technology and expertise needed to adapt successfully to the new regulations.”
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The consumer duty becomes law at the end of July. It requires all regulated financial services firms to place customer wellbeing at the heart of their business model.
The Fuse survey found that despite the lack of readiness, most lenders believe that the new consumer duty is a positive move for the financial services sector, with 77 per cent believing that the new rules are the first step in a long journey to improving borrower outcomes.