The Financial Conduct Authority’s (FCA) Financial Lives 2024 Survey provides a comprehensive overview of UK consumers’ financial situations, behaviours, and attitudes.
For consumer credit firms, these insights are invaluable for aligning operations with regulatory expectations and enhancing customer outcomes.
What’s New in the 2024 Survey
- Digital Inclusion Improvements: The number of digitally excluded adults decreased from 6.9 million in 2017 to 1.2 million in 2024, indicating increased access to online financial services.
- Vulnerability Trends: Approximately 49% of UK adults exhibited characteristics of vulnerability in 2024, a slight decrease from 52% in 2022.
- Financial Resilience: 13.1 million adults (24%) had low financial resilience, consistent with 2022 figures.
Key Takeaways for Consumer Credit Firms
- Addressing Financial Vulnerability
With nearly half of UK adults showing signs of vulnerability, firms must:
- Enhance Support Mechanisms: Implement systems to identify and assist vulnerable customers effectively.
- Tailor Communication: Ensure clarity and accessibility in customer interactions, accommodating various needs.
- Promoting Financial Resilience
Given that 1 in 10 adults have no cash savings and 21% have less than £1,000:
- Offer Financial Education: Provide resources to help customers build savings and manage finances.
- Develop Flexible Products: Design credit products that accommodate unexpected financial challenges.
- Leveraging Digital Channels
The reduction in digital exclusion presents opportunities to:
- Expand Online Services: Enhance digital platforms for easier access to credit services.
- Utilise Data Analytics: Analyse digital interactions to better understand customer needs and behaviours.
Compliance Considerations
The FCA’s emphasis on the Consumer Duty, effective from July 2023, underscores the need for firms to:
- Act in Good Faith: Prioritise customers’ interests in all business operations.
- Avoid Foreseeable Harm: Identify and mitigate potential risks to customers proactively.
- Enable Informed Decisions: Provide clear, timely, and relevant information to help customers make sound financial choices.
ALPH Legal & Compliance can support you in creating high-quality Consumer Duty reports and compliant policies across your business, along with quarterly and annual reports, along you’re your board-level updates/reports.
Consumer Duty remains a key focus for all regulated firms, and we have an established and compliant process to support you with all your Consumer Duty requirements, including policy review, data considerations and reporting – this not only helps with your Consumer Duty requirements but also is critical to supporting your business growth.
Conclusion
The Financial Lives 2024 Survey highlights critical areas for consumer credit firms to address, including financial vulnerability, resilience, and digital engagement. By aligning strategies with these insights and adhering to the FCA’s Consumer Duty, firms can enhance customer outcomes and ensure regulatory compliance.
For a detailed overview of the survey findings, visit the FCA’s Financial Lives 2024 Survey.
ALPH Legal & Compliance can assist with all aspects of your business’s compliance needs, whether that be compliance structure and policy, internal/external audit, business and regulatory change support, authorisation, supervision or just some general expert advice and guidance!
Take action now with Alph Legal & Compliance services!
With all the regulatory shifts on the horizon, now is the time to act. Don’t wait until compliance gaps appear—engage with ALPH Legal & Compliance today to ensure your firm is ahead of the curve. Whether you need tailored guidance, compliance support, or strategic insights to drive new business, ALPH Legal & Compliance is your trusted partner in navigating FCA regulations with confidence.
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