FCA Board Report findings: Key insights for asset finance

The recent FCA Board Report findings offer critical guidance for financial services firms, particularly in the asset finance sector, where balancing customer outcomes, compliance, and operational efficiency is essential.

These insights highlight areas where firms can strengthen their approach to Consumer Duty and align their practices with regulatory expectations. Here’s what the findings mean for asset finance and how they connect with effective outcome monitoring and data-sharing practices.

Findings relevant to the asset finance sector

Data sharing across the supply chain: The FCA stresses the importance of transparent, secure, and consistent data sharing between brokers, lenders, and intermediaries. For asset finance firms, this means establishing robust protocols that promote collaboration and accountability across the value chain, ensuring customer outcomes are not undermined by gaps in communication or data access.

Monitoring customer outcomes: Firms must demonstrate that their products and services consistently deliver good outcomes, not only for individual retail customers but also for SMEs and larger corporates. This requires effective tools and processes to track and assess customer journeys in real time, allowing proactive identification of risks and corrective actions.

Support for vulnerable customers: Addressing the needs of vulnerable customers remains a priority. Asset finance firms need clear frameworks to identify and respond to the specific requirements of these groups, ensuring fair treatment and tailored support at every stage of the customer journey.

Transparency in commission disclosure: Following the Court of Appeal ruling, there is increased regulatory pressure to disclose commission arrangements transparently. The FCA highlights the need to balance transparency with maintaining trust and strong relationships between brokers and lenders. Standardised, practical approaches to disclosure can help firms navigate this challenge effectively.

Cultural alignment with Consumer Duty: Embedding a customer-centric culture is essential for firms to deliver on Consumer Duty principles. This requires integrating these principles into everyday decision-making, processes, and governance to ensure good outcomes for all customers.

How firms can respond

Strengthen data sharing protocols: Establish secure, consistent, and transparent data-sharing mechanisms across the supply chain. This not only supports compliance but also improves collaboration and accountability, ensuring that all parties are aligned in delivering good customer outcomes.

Invest in outcome monitoring tools: Firms should adopt real-time monitoring solutions to identify risks, track outcomes, and demonstrate compliance. These tools allow organisations to proactively manage risks and provide actionable insights tailored to asset finance customers.

Prioritise vulnerable customer support: Develop clear strategies to identify and address vulnerabilities early in the customer journey. Staff training, advanced data analytics, and tailored solutions can ensure fair outcomes and support for all customer segments, including those most at risk.

Improve commission disclosure practices: Implement standardised processes for commission disclosure that meet regulatory expectations while maintaining trust between brokers and lenders. Transparency should be seen not just as a regulatory requirement but as an opportunity to strengthen relationships and build trust.

Foster collaboration and cultural change: Encourage collaboration between brokers, lenders, and intermediaries to align the entire value chain with Consumer Duty principles. Embedding a customer-centric culture across all levels of the organisation fosters accountability and drives better outcomes.

Aligning FCA priorities: A call to action

The FCA’s recent findings underscore the need for asset finance firms to prioritise data quality, outcome monitoring, and collaboration across the value chain. By embedding customer-centric practices and adopting tools and frameworks that support these priorities, firms can not only meet regulatory expectations but also enhance their reputation and strengthen their customer relationships.

These findings are a clear reminder that delivering good customer outcomes is both a regulatory obligation and an opportunity to build trust and create competitive differentiation in the asset finance sector.

At ConsumerDuty.com, we’re committed to helping firms navigate these challenges with confidence. Our fully managed programmes integrate advanced tools and expert guidance to ensure your organisation delivers measurable improvements in customer outcomes.

To find out more about ConsumerDuty.com visit the website at www.consumerduty.com or contact James Edmonds, Director, on tel: 07411 732913 or email: james@consumerduty.com