DEMSA Summary: Financial Crime / Council Tax collection / Debt advice / Cyber / AI / Collaborations / Events / Training

Summary – Read the full update here (including all the links & more)

In this week’s update there’s a significant focus on the evolving landscape of financial services, particularly in the realm of consumer debt and regulation.

The update touches upon a variety of topics ranging from general sector activities to specific issues like financial crime training, council tax collection, and the impact of economic challenges on households.

Notably, it includes insights from various organizations and events, underscoring the importance of adapting to regulatory changes, understanding consumer vulnerability, and the growing significance of cybersecurity in financial services.

Key Points

  1. SCOR Interim Chairman and Challenger CRAs: Discussion on the credit reporting sector with Peter Wallwork as interim chairman at SCOR and the emergence of challenger CRAs like Hope Macy and Aperidata.
  2. YouGov Christmas Poll: Commissioned by StepChange Debt Charity, highlighting financial strains during Christmas, especially in households with children.
  3. WADA’s ‘State of Debt Advice’ Briefing: Focuses on the capacity challenges in the debt advice sector and future funding needs.
  4. Economic Abuse and Coerced Debt: Emphasis on banks creating safe disclosure mechanisms for economic abuse victims, with Monzo Bank’s initiative as an example.
  5. StepChange on Deficit Budgets: Importance of addressing financial vulnerability in households, especially with deficit budgets.
  6. Cyber-Security Day Reminder: Highlights the criticality of cybercrime prevention and secure AI development.
  7. Updated Financial Crime Training: Focus on training for senior management and MLROs in light of recent regulatory updates.
  8. Council Tax Collection Report by UK Parliament: Recommendations for a more empathetic approach to council tax collection.
  9. Referral Systems in Debt Advice: Importance of effective referral systems in debt advice, as per PFRC and StepChange report.
  10. Collaborations and Events: Various events and collaborations focusing on topics like customer vulnerability and financial wellbeing of disabled people.
  11. Vulnerability Training Aligned with Consumer Duty: New training modules targeting operational management and frontline staff.
  12. Impact of Economic Challenges on Households: Insights into how economic challenges affect borrowing and spending habits.
See also  DEMSA update: Duty self-assessment / Debt adviser webinar / Complaint handling / Illegal lending / Training / Events

Key Statistics

  1. One in four people will struggle to afford Christmas this year, with 34% of households with children affected.
  2. 19% of those intending to borrow for Christmas expect it’ll take them more than a year to repay.
  3. 45% said their borrowing this year would be higher than during Christmas 2022.
  4. 75% cite the higher cost of living as the reason for needing to borrow.
  5. 15 million people (28% of UK adults) are likely to use unregulated Buy Now, Pay Later schemes for seasonal spending.

Key Takeaways

  • The credit reporting and analytics sector is experiencing a notable rise in challenger companies and evolving market dynamics.
  • Financial challenges during festive seasons like Christmas are increasingly leading households, especially those with children, to rely more on credit.
  • The debt advice sector is facing capacity issues, highlighting the need for more funding and resource allocation.
  • Economic abuse is a critical issue where financial institutions play a key role in providing safe disclosure channels.
  • Addressing the financial vulnerability of households in deficit budgets is crucial for financial stability.
  • Cybersecurity and secure AI development are increasingly important in the financial sector.
  • Continuous updates in financial crime training are essential to keep pace with regulatory changes.
  • Council tax collection methods are being scrutinized for more empathetic and feasible approaches.
  • Effective referral systems are vital in providing comprehensive debt advice.
  • Collaborative events and reports provide valuable insights into customer vulnerability and financial wellbeing.
  • New training initiatives are focusing on aligning with Consumer Duty, especially for frontline staff.
  • The high cost of living is a significant factor influencing borrowing habits and financial decision-making.
See also  DEMSA Summary: IPA update / Personal Insolvency reform / Collaborations / FCA Duty / Training events

Access all the updates here

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