In Focus Collections


Taking a view on the FCA consultation


The latest consultation has important implications for staff incentives, remuneration, and performance management in consumer credit


Karl Werner Chief executive, MotoNovo Finance Motor Division


In July, the FCA issued a consultation document ‘Staff Incentives, Remuneration and Performance Management in Consumer Credit’, seeking feedback from the market by 4 October, as they move towards formal plans or guidance. It is likely to have a major impact on both car sales and finance. The FCA’s announcement, which is set to


affect client-facing staff and their managers across all areas of lending and collection activity, is likely to have a significant impact on both car sales and car financing. Overall, we believe that the changes that


are likely to be required will help to enhance consumer protections and perceptions of dealer finance by ensuring their needs are at the forefront of the credit process. As always, we are ready to work with the


FCA through the consultation and with our dealers to support them in creating the changes required positively. Dealer finance will remain a key aspect of car sales and we continue to believe that the dealer will be an important part of this process.


Positive and negative The FCA’s Consultation Paper identifies both positive and negative practices from its thematic review of the market. Helpfully, the conclusions are more prescriptive in how it expects the wider market to change than in previous work. I am pleased to see the FCA has outlined


some clear steps that it sees as likely to be required in their draft Non-Handbook Guidance notes. These include areas such as assessing the risks associated with consumer credit activities and insight on staff incentives that it see as having both a positive and negative impact upon the consumer.


36


Helpfully, the conclusions are more prescriptive in how it expects the wider market to change than in previous work


It is at pains to point out that there is no


‘one size fits all’ approach, but we can see a path emerging to help guide dealers on the likely changes ahead.


Unregulated activity The scope of the FCA’s plans includes unregulated activity financed by a credit agreement for which the firm is carrying on consumer-credit lending or broking. Even in the case of 0% finance, where no dealer or sales-person income may accrue,


www.CCRMagazine.co.uk


the risks to the consumer and due processes will need to be addressed in the way the finance is promoted. This is a constructive approach, and one


where technology can play an increasing role to help the dealer and their customer. Given the prominent role of finance as a


marketing tool in car sales, we foresee an even more important focus for dealers on creating a positive customer experience; one that can further enhance the reputation of dealer finance. Within this, the importance of measurable


procedures and controls in the financing approach will increase inevitably. It seems probable that we will see a wider


role for technology with the customer taking greater control of their own finance journey. Our new self-serve application would appear to suit this role in supporting both the dealer and consumer. CCR


September 2017


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52