Getting over the line is only the start
Since April 2014 the Consumer Credit industry in the UK has been going through one of the most profound and significant changes for years within financial services. The Office of Fair Trading have now been replaced by the FCA who have introduced a far more rigorous set of expectations and severe consequences if these are not met.
As part of this regulatory change all firms offering consumer credit have to apply for authorisation. This process involves completing an in depth questionnaire supported by policy and procedure documentation to satisfy the FCA that the firm is fit to operate in a compliant way. Achieving permission is a significant milestone on its own however it is only the beginning of an ongoing journey for firms.
For the FCA the process of authorisation of some 50,000 firms in the UK is a serious task which is likely to be finished toward the end of 2016. After this the focus of the FCA will shift to proactively regulating the industry. Firms will start to come under scrutiny and have to start demonstrating how they are meeting the standards they have set for themselves. The FCA are also likely to review regulation and start to issue updates and changes. Also as we have seen in other markets, complaint management companies may start to target consumer credit providers.
The key message is not to focus solely on the authorisation process but to make sure you have all the necessary policies and procedures in place and that they are embedded as part of the culture of the business. This is what the FCA will be looking to see when their real work begins.