Regardless of your political inclination, it's hard to argue against the fact that - for many years now - the UK's unstable and ineffective government has led to a lack of resistance and suggestions on ways to improve the current overbearing stranglehold the regulator has on the consumer credit sector. However, we now have a majority government - we have finally exited the EU - and promisingly for the consumer, we're starting to see the first green shoots - from the ashes of the more infamous payday lenders - a 'phoenix' of new players entering the consumer credit sector. Where senior leadership figures have spent many years toiled in regulatory stalemates surrounding complaints redress, the sector does seem to be slowly regenerating for consumers that have long yearned for a much better access to credit to finance their (often chaotic) lives.
So, have things got better?
With regard to the wider regulatory landscape, not necessarily. Whilst the sector had historically survived on the occasional update to keep in line with the latest consumer trends, along came the FCA in 2013 to impose a rather draconian set of rules and regulatory aspects - and a curious interpretation regarding affordability and vulnerable customers. We need to be realistic and accept that the utopia of every last consumer being sensible with their money is never going to happen - particularly in the dawn of the 'buy now pay later' era fuelled by reality TV and social media influencers - and therefore there has never been a more crucial time for the regulatory bodies in question to adopt common sense - to keep the consumer safe, give them access to a wider range of credit, and therefore allow them to take control of their financial destiny and become wiser for the experience.
What does that mean for the modern compliance practitioner?
It goes without saying that the customer must be at the forefront of any decision-making process undertaken by the compliance team. The compliance team must be thorough and demonstrate their firm has satisfied a plethora of requirements outlined in everything from the existing regulatory factors to the various ongoing 'Dear CEO' letters, otherwise the FCA has the capability to flex its powers accordingly. What this often means is that, where smaller lenders have small compliance teams, each individual will be required to cover quite a broad area of expertise - not just theoretically, but more importantly, in the practical application of the rules - meaning those in narrow specialisms at much larger institutions might find themselves exposed.
Firms must be as clear as they possibly can regarding the tasks the incoming compliance professional can be expected to undertake - and more importantly the behavioural traits they will need to possess to become that all-important 'culture fit' for the business. Whilst firms go on quite an intense evolution - particularly in their formative years - this needs to be constantly re-calibrated as the business establishes new objectives, updates its product offering - and holds different FCA permissions. The recruitment consultant must often now meet a number of individuals within any one 'client firm' to take a firm understanding of what works best from a behavioural point of view - and must be transparent to the candidate about the challenges and regulatory areas they're likely to have to overcome in this sector. The perfect 'culture fit' will relish such challenges, stick around for a long time, and help take the firm to that all-important next stage in their journey.
What are your thoughts on Consumer Credit? We’d love to hear from you. If you’re looking for advice on the consumer credit sector within the recruitment market or just want a general chat with our risk and compliance specialist, contact us:
LinkedIn: Broadgate Search
London: +44(0) 203 817 9757
Manchester: +44 (0) 161 509 5481
Dublin: +353(1) 905 86 01
Visit the ICA’s website: