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Retail Finance round-up: Key developments and horizon scanning

Retail Finance round-up: Key developments and horizon scanning

  • United Kingdom
  • Financial institutions - Retail finance


With the retail finance sector experiencing significant regulatory and legislative change, we reflect on the key developments in retail finance from 2015 and examine the outlook for 2016.

The regulatory landscape

It was a year of change for the Financial Conduct Authority. Martin Wheatley, who had led the FCA from its inception and during a time of record fines, stepped down as Chief Executive in September. Tracey McDermott, former Director of Supervision, moved up as temporary CEO.

Chancellor George Osborne had said a “different leadership” was needed to take the regulator forward. The FCA is now undertaking a global search to recruit for Mr Wheatley’s permanent replacement.

With three new board members also being recruited this year, how will the regulatory landscape change in 2016?

The emphasis is shifting from managing and mitigating risk to facilitating competition and embracing innovation. This change is reflected in the key themes emerging from the regulator.

Some areas of focus remain firmly on the agenda. As identified in its Business Plan for 2015/2016 published in March 2015, poor culture and control remains a high priority as does the pace of technological change, with the FCA concerned that the rapid development may outstrip firms’ investment, consumer capabilities and regulatory response. To assist firms with the challenges presented by technological change, the FCA launched Project Innovate at the end of 2014.

Many of our clients are focused on digital projects. Our digital team is running a series of events through 2016 to build on the major event we held last year.

It has been an intense period of activity for the consumer credit sector. Nearly two years on from the transfer of regulation from the Office of Fair Trading to the FCA, the authorisation process is nearing completion.

The allocated application periods for full authorisation are due to run until 31 March 2016. The FCA consulted on changes to the Consumer Credit Sourcebook (CONC) in February and amended rules came into force in November covering in particular financial promotions and joint borrowers. Looking ahead, the FCA will continue to focus on the consumer credit sector, identifying two areas specific to the sector in its Business Plan:

  • Poor culture and practice in consumer credit affordability assessments
  • A range of issues in unfair contract terms given sharper focus by developments in legislation (such as Consumer Rights Act) and legal precedents (following a number of cases before the European Court of Justice).

What are the key themes and dates for the year ahead and what action do you need to take to prepare?

Against that background, our 2015/16 Retail Finance round-up sets out 12 key developments you should be aware of and what to expect in these areas in the period ahead:

  • Senior Managers Regime
  • Consumer Vulnerability
  • Supervisory model
  • Handling of PPI complaints
  • Complaint handling
  • Credit card market study
  • Payment Services Directive 2
  • CMA retail banking market investigation
  • Financial advice market review
  • Claims management regulation
  • Mortgage Credit Directive
  • Payday lending market investigation

Read or download the full publication here.  

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