FIS Horizons 2023 Brochure - Riding the wave - Flipbook - Page 17
UK cost of living crisis:
key issues for retail
financial institutions
Jonathan Chertkow
Partner, London
Eimear O’Brien
Partner, Dublin
Eoin O Connor
Managing Partner, Dublin
Elizabeth Boison
Partner, Washington, D.C.
With “real” disposable incomes falling (due to inflation, high energy prices and
interest rate increases), the cost of living crisis is having a knock on effect on
financial services firms, with particular disruption in the retail lending market.
The crisis comes at a time when regulated firms
in the UK are facing an increased focus on
avoiding foreseeable harm as they move from
treating customers fairly (TCF) requirements to
implementing the new Consumer Duty.
Despite guidance that the Consumer Duty
should not be applied retrospectively, the
Financial Conduct Authority (FCA) seems to
want to apply its spirit and intent towards the
challenges created by the current difficult
economic landscape to ensure good outcomes
for consumers. To a certain extent this chimes
with policy objectives that underpin the “S”
(Social) in the regulatory focus on ESG
measures (not least financial inclusion as a
policy objective).
With more consumers likely to be at risk of
experiencing financial difficulties and following
the publication of the key findings from the
FCA’s Borrowers in Financial Difficulty review,
another area of focus for firms in the retail
lending space should be affordability and
forbearance. They should be comfortable that
their related policies and procedures offer
adequate protection should they come under
the spotlight.
In this article we highlight the above, as well as
other issues which need to be considered by
firms within this sector, focusing in particular
on the UK but also with snapshots of similar
trends in Ireland and the U.S.
Read the full article on Hogan Lovells Engage
here.
Article correct as of 10 November 2022.
Charles Elliott
Counsel, London
Julie Patient
Counsel, London
