Financial Services Fighting the Effects of Coronavirus
The industry is taking the fight to Coronavirus, at the front of the charge is the Bank of England, closely followed by the FCA.
Of course, smoothing over the economic pressures caused by the lockdown is the industry’s goal. There are the well publicised support measures announced by the Treasury, which the Bank of England has been working hard, alongside the major lenders, to implement. Beyond that we can see action from both the PRA and FCA, such actions are largely in line with the regulators core objectives.
The PRA has paused its counter-cyclical capital requirements, freeing up cash reserves firms have built since the fall out from the Credit Crunch and is providing support to major firms in order to help keep the market stable.
The FCA, focusing on its strategic objective to make markets work well through providing protection to consumers. Such actions have been focused on ensuring firms provide payment breaks for customers suffering financial difficulties and insurance firms provide flexibility within their products.
Prior to the crash, the FCA were focusing on the following key pieces of work:
In order to allow firms to focus on their virus response the regulator has delayed many of their ongoing consultations and publications until, in the most part, October 2020.
They have also required the following of regulated firms:
Display COVID-19 information on the website.
Firms must take steps to manage their financial resilience and liquidity and must inform the FCA if firms are in difficulty, this is important as it will allow the FCA and PRA to manage market resilience.
Extension of GABRIEL reporting where firms are unable to provide results in time, the extension can be for up to two months.
Firms can build a more flexible approach to completing customer due diligence in light of the current circumstances, sending documents rather than meeting face to face, for example.
Employees who would usually sit professional qualifications under the T&C regime can delay these if required.
Where firms are struggling to answer complaints they should focus on paying redress to those who it is due, acknowledging complaints and responding to vulnerable customers first.
Payment breaks for certain sectors, such as buy-now-pay-later, rent-to-own, personal loans, credit cards and catalogue debt. Payment breaks can be up to three months and should not impact the customer's credit files. Similar requirements have been placed on mortgage providers.
A full list of actions taken by the FCA can be found here: https://www.fca.org.uk/firms/information-firms-coronavirus-covid-19-response