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News for Members

11 May 2016

2016 Convention Review - ‘Enhancing the Customer Experience’

Radisson Blu

The Radisson Blu Hotel, East Midlands Airport was the location for the CCA's Annual Convention this year and the feedback received by the team so far confirms that it was another resounding success.

Themed around 'enhancing the customer experience', the convention presentations and workshops focused on the need for customers' interests to be at the heart of all of our businesses.  Although the journey to authorisation over the last year has been difficult at times, we believe that the process brings us a step closer to delivering the highest standards of conduct to our customers. We've summarised the key elements of the opening presentations below: 

CHAIRMAN'S ADDRESS - PHIL CAREYPhil Carey

Uncharted Times...

Phil's address started with a review of the external factors which are impacting on the whole financial services sector including the migrant crisis, volatile political situation in the Middle East and ongoing financial instability.

Impacts of regulation...

He then went on to talk about the affects of regulation on credit businesses and their customers and the need to find a middle ground which ensures fair consumer outcomes whilst creating space for firms to compete, innovate and deliver quality products to the people who need them.

The impact of regulation on a firm's profitability, particularly smaller home credit firms, was explored.  Many of the CCA’s members provide small loans generating marginal profits.  With this business model, even modest increases in regulatory costs can have a large impact on profitability. Rate caps were touched upon together with the need for an evidence-based judicial design process (as with the recent FCA payday cap) in order for them to be beneficial.

FCA's Regulatory Sandbox...

Phil touched on the concept of the FCA's 'regulatory sandbox', which aims to encourage innovation in the heavily regulated financial services sector. Whilst welcoming this development, Phil suggested that the Sandbox could also be used to test the efficacy and effectiveness of current regulation.

Regional Meetings...

Phil's position as Chair of the CCA provides an opportunity to visit the regions, an important part of the job which he particularly enjoys.  Last Autumn he attended six regional meetings and the AGM of CCA Republic of Ireland.  He intends to visit every other region during 2016. These get-togethers not only represent a forum for learning and sharing best practice, but they also provide members with a platform to speak openly about those issues which concern them. Phil suggested that it would be useful for the Regional Chairs to meet up once a year, outside of the context of the National Council, to share agenda ideas and information on high quality, relevant speakers.  

And finally, thanks go to...

Phil concluded his presentation by thanking all those members who serve on the National Council and Committees and also the firms who allow them to do so.  He also recognised the hard work of the CCA team, not only in handling a diverse range of member issues and queries but also in raising a positive profile for the home credit sector, both within the FCA and the various consumer bodies such as the Citizens Advice Bureau.

 


 

DIRECTOR GENERAL'S REPORT - JACK BENNETT

Jack commenced his presentation by sharing his positive experience of working with the FCA. He has found the people at all levels committed to regulation in a fair and proportionate manner.  He believes that rather than a 'them and us' culture, the strategy going forward should be collaborative with the home credit sector and the FCA working together to achieve an outcome which is both satisfactory and fair for the customer.Jack Bennett

Authorisation & Regulation...

The journey to authorisation has not been easy for many of the CCA's members, involving changes in business practice, culture and compliance. However, the latest status data (dated 26th April 2016) from the FCA is encouraging:

576 firms applied for home credit permission

403 firms have been authorised

22 firms withdrew their applications

46 have since withdrawn from home credit business

2 firms have been refused

So in summary, 403 out of 506 firms applying for HC permission have been authorised, equating to 80%.

Jack quoted Tracey McDermott, acting CEO of the FCA, speaking at the recent Credit Summit:

"Authorisation is just the start of the journey towards putting the customer at the heart of your business"

He also mentioned some other important points made in her speech regarding the relationship between the FCA and the credit industry, with both wanting:

an industry which is known for the highest standards of conduct towards consumers

to create a competitive landscape where consumers take their business to the  providers best suited to their needs

and a market that works well with profitable, sustainable businesses meeting the needs of customers, both now and in the future

Ultimately home credit firms should not only be aiming to meet the regulatory requirements but should also be focusing on delivering the right outcomes to their customers. 'Doing the right thing' should become part of the DNA of all firms.

Supervision/Reporting...

Jack reminded delegates about the importance of keeping the FCA up-to-date with details about their businesses.  This should not only include mandatory reporting of data such as income and customer complaints but also other issues such as a change in management, IT systems going down etc.  The general message is, if you're not sure about whether to tell the FCA, just do it.

FCA 2016/17 Business Plan...

The FCA has highlighted seven priority themes around which they will use their discretionary resources, four of which are more likely to involve the CCA's members:

Financial crime and anti-money laundering - account closure without good and stated reason is on the agenda - as well as better AML controls and ensuring customers are aware of scams

Advice - better access to affordable, professional advice for consumers

Firms' culture and governance - putting in place a strong ethos to improve competition and help customers

Better treatment for existing customers  - giving them a fairer deal with greater transparency

Onwards and upwards at the CCA...

The last twelve months at the CCA have seen some changes too.   A reduced membership and subsequent drop in subscription income for 2016 onwards has been partly offset by the savings resulting from the team's move to Minerva Court last year and a reduction in staff numbers.   A move to digital communication via email, website and social media has also produced significant cost savings.  The CCA is pleased to report that a new improved website is currently in development which will not only be mobile-friendly but will also improve the flow of information to both our members and other target markets.

Ongoing Activities...

The number and diversity of consultation responses that the CCA submits continue to grow with UK, Scottish and Welsh government departments and regulators, Trading Standards, Citizens Advice and the EU to name a few of the organisations involved.  Jack extended his thanks to David Rees for his support in generating high quality, informed and influential responses on behalf of the CCA and its members.

The CCA has also been influential in:

securing long-term financial support for the national Illegal Money Lending Team developing the Money Advice Liaison Group from a loose discussion forum to a company limited by guarantee

keeping the home credit authorisation and supervision teams at the FCA up-to-date with the issues arising from the CCA's activities

Jack concluded by thanking Phil for his support and encouragement.

 


 

KEYNOTE ADDRESS - PAUL JOHNSON, DIRECTOR, INSTITUTE OF FISCAL STUDIES

Paul's upbeat delivery of a presentation entitled 'Kicking the can down the road' couldn't compensate for the current state of the UK economy but our audience was provided with a valuable overview of the key drivers impacting on all of our businesses:Paul Johnson

- Low interest rates prevail and are not predicted to rise any time soon

- Productivity has not grown since 2008 (unprecedented) resulting in wage cuts

- Increased employment has reduced inequality

Austerity:

• will continue with significant spending cuts forecast to achieve budget balance in 2019/20

• NHS, schools and defence will face cuts of 3.7% (£12bn) between 2015-16 and 2019-20

• Further pressures will be created by a growing and aging population resulting in an increased demand for public services such as health and social care services

Tax:

• Increase of personal allowance and higher rate threshold has cost £8 billion

• 40% more additional rate taxpayers since April 2010

• 50% increase in numbers losing child benefit projected over next 5 years

• Recent combination of high employment and low earnings growth has hit revenues hard

Brexit - short term impact will be increased uncertainty and more costly trade is forecast to be a longer term consequence

Paul's presentation slides are available on request by emailing Lee at the CCA at lee.mcavery@ccauk.org.


CONVENTION GALLERY

The official 2016 Convention Gallery is now available to view.  Please follow these steps:

1.  Go to the photographers website - www.icon-studio.co.uk
2.  Select Client Area from the main navigation bar
3.  Click on the CCA graphic
4.  Enter the password - ccarad2016

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