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running checks that lead to the right decision from both the consumers’ and lenders’ perspectives. There will not be as many though who
know that the technology has a welcome extra benefi t; it means lenders no longer have to rely on patchy due diligence documentation – often amounting only to a disparate mix of paper proofs – when trying to defend mis-selling claims.
Robust They now have a robust decision-making process, not susceptible to human error, that generates a digital audit trail able to stand up to the most intense scrutiny; much like that of the payday lenders. All of the data elements that go towards making every decision are stored and an audit kept of how they are used. So, unlike their payday counterparts, BNPL
lenders can have a lending policy in place that is signed off by their compliance team and diligently enforced by technology. Their decision making can be 100% consistent and backed-up by a digital footprint.
Going forward, if a mis-selling claim is
made, a lender has a watertight justifi cation for its decision to present to a regulator. Something that most payday lenders could only dream of having. BNPL operators will, therefore, largely
be able to weather any storm that new regulations and claims chasers generate. They will have the capability to handle mis-selling cases in a much more cost-eff ective and impressive manner than payday lenders. Instead of the time-consuming task of
manually collating documentation to support their case, all they need do is retrieve the digital record at the press of a button.
Ombudsman Those cases that are fi led with the Ombudsman will no doubt still involve a costly admin fee that has to be paid for by the lender, but this time the cases will be much more diffi cult to prove. And this alone will steer claims chasers away from lenders that have invested in a digital back-offi ce. Claims chasing companies have a known ruthlessness for setting their sights on those
So, unlike their payday counterparts, BNPL lenders can have a lending policy in place that is signed off by their compliance team and diligently enforced by technology. Their decision making can be 100% consistent and backed-up by a digital footprint
lenders that they think are easier targets. If there are to be any casualties of the regulatory changes in hand, it will be those lenders that fail to update their back-offi ces over the next 12 months. But those with the right decisioning
technology in place can rest easy. Should the need arise, they will have the equivalent of a silver bullet to present to a regulator or claims chaser. CCR
In Focus
March 2022
www.CCRMagazine.com
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