Nikhil Rathi has spoken on how FCA is looking for solutions to tackle financial exclusion, but that it needs help from industry and technology to do so. He explained that FCA does not have the remit or powers to tackle all financial exclusion issues, but there is still much it can do.
He noted statistics that show how many people may at some stage be viewed as financially vulnerable and spoke of initiatives currently underway. He mentioned a tool that uses AI to guide customers through a debt management conversation, which the customers engaged with as they felt less “judged” discussing financial details with robots than humans.
FCA has already introduced the Consumer Duty, taken action on savings accounts, worked with the ICO to ensure firms cannot “hide” behind the GDPR to be proactive in approaching customers about the most appropriate products, putting in the price cap for HCSTC, working with other regulators on forbearance guidance, and driving on its initiative on the advice/guidance boundary.
FCA’s immediate initiatives will include:
- doing more to understand why 1.1m adults do not have, and in many cases say they do not need or want, a bank account;
- encouraging more banking hubs;
- preparing to regulated the BNPL sector;
- continuing to work on securing necessary changes to potentially unfair and misleading terms of some of the major lenders in the BNPL sector;
- working on financial education – having identified key issues of over 55s taking out large sums from pension pots and young adults struggling to get on the housing ladder.
He moved on to discuss how technology can help, and how institutions are helping older customers to use it – and said figures are showing a significant increase in older adults using mobile apps. FCA recognises also the opportunities AI offers, the need for commercial incentives for business and how the current D&I initiative should work to better understand the needs of a diverse customer base by having a genuinely diverse and inclusive workforce within financial institutions.