FCA to increase data requirements for consumer credit firms
The Financial Conduct Authority (FCA) is planning to increase its data requirements for consumer credit providers, to help ensure that firms are delivering good customer outcomes in line with the Consumer Duty.
The City watchdog is proposing to introduce three new product sales data (PSD) returns: one for sales, one for performance and one for back book data.
Lenders will submit sales and performance data on a quarterly basis and back book data as a one-off submission.
It is proposing to collect core agreement data; borrower and affordability data; charges and fees; and arrears and forbearance figures.
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“In the consumer credit market, we are particularly interested in indicators of customers experiencing financial difficulty, irresponsible lending that causes consumer harm and indicates a market that does not function effectively, and monitoring that firms are acting to deliver good retail customer outcomes in line with the Consumer Duty,” the FCA said in the consultation paper.
“We believe that collecting PSD will help us identify these trends, in line with our overarching data strategy which is centred on making better use of data to spot and stop harm faster.”
The changes will cost the industry up to £104m in one-off costs, including IT changes, and £1.55m in ongoing costs, according to FCA estimates.
The regulator is inviting feedback on the consultation paper until 15 November and aims to publish a final policy statement in the first quarter of next year.
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It is planning to implement the new data requirements for sales and back book from 1 January 2025, and the performance data from 31 March 2025.
“The consumer credit market is one of the largest, and most impactful, financial markets in the UK with approximately 120 million consumer credit agreements, over 40 million consumers and over £200bn in outstanding balances,” the consultation paper said.
“The proposed PSD returns discussed in this consultation paper form part of our multi-year plan to design and build PSD and regulatory returns for consumer credit regulated activity.
“Overall, they will enhance the information collected from firms to enable us to deliver a more data led approach to supervision and to progress our ambition to become a data-led regulator. This will, in turn, support more consistent and accurate regulatory oversight of consumer credit markets and which will lead to benefits to firms and consumers.”
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