FCA Director sets out expectations of firms around mortgage forbearance

Speaking as he introduced the Mortgage Forbearance Webinars, which are being used to help firms prepare for the next phase of supporting mortgage customers through the pandemic, Jonathan Davidson (Executive Director of Supervision – Retail and Authorisations) set out the FCA’s expectation of how firms should be delivering positive outcomes for customers.

The focus comes at the point a significant number of customers will be coming to the end of an agreed payment deferral, with the FCA’s data showing that most mortgage deferrals have now expired. In the FCA’s perspective, this seemed to signal a shift in approach, with ‘crisis support’ moving towards ‘tailored support’ for the individual.

However, they have cautioned about moving headlong into ‘business as usual’ due to the absence of clarity on what the new environment looks like, acknowledging many borrowers will be facing a loss of income, over differing durations, and solutions may need to reviewed regularly as their circumstances change.

Other key areas highlighted were:

  • Outcomes need to be right for individual borrowers rather than “one size fits all solutions”.
  • Operational challenges remain and there needs to be continued focus on how firms resource, train, assess, monitor, and mentor customer-supporting functions. Management of staff working remotely in a demanding job supporting customers in financial distress requires special care.
  • Ensuring appropriate oversight of third-party firms you are outsourcing customer impacting services to.
  • The sheer number of borrowers needing help in a short period of time may require automated solutions. However, hands on support should be available and clearly communicated to those that need it and customers on an automated journey need to understand the implications of what they are agreeing to.
  • Outcomes need to be monitored to ensure that, where issues occur, the customer does not experience a detrimental result.
  • Customer vulnerability needs to be identified and acted on.

Significantly, over the coming months, the FCA will be looking at how your firms have adapted to the challenges, and the outcomes received by consumers through supervisory ‘multi-firm’ work. To assist firms in assessing whether they have met FCA expectations, FourthLine’s Consulting team has produced toolkits for both the FCA’s Temporary and Additional Coronavirus for Firms, downloadable from the following links:

Download our COVID-19  FCA Additional Guidance Toolkit HERE

Download our FCA  Guidance Self-Assessment Toolkit HERE


For any support needs you may have around meeting the FCA’s expectations around Coronavirus measures taken, feel free to contact our Consulting team

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October 8, 2020
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Ross Molyneux
Written by Ross Molyneux

Ross leads our Risk Consulting proposition and specialises in risk management and regulation. He has worked extensively across non-financial and financial risk management engagements in his time in consulting in both the UK and New Zealand. After starting his early career in industry working across different financial services institutions, Ross moved into consulting in 2011 with Deloitte, primarily leading and performing financial risk engagements including capital adequacy, liquidity, credit risk, and recovery and resolution planning. Following time in Aviva’s Internal Audit function, Ross moved to help build EY’s North of the UK extended assurance practice, leading and performing a range of engagements across both financial and non-financial risk, including extensive engagement with large banks, asset managers and investment firms as they continued to face into the challenges of revisions to existing regulation and new requirements, such as the Senior Manager & Certification Regime (SMCR). In 2017 Ross made the decision to spend time overseas, joining KPMG New Zealand’s Auckland Consulting practice. Joining as an Associate Director, Ross was quickly promoted to Director and co-led the firm’s response to emerging conduct and culture challenges arising from the Australian Royal Commission (ARC) and new operational resilience requirements arising from the Reserve Bank of New Zealand’s (RBNZ) Outsourcing Policy. Working with a range of entities since being in New Zealand, Ross has led engagements ranging from internal audit co-source support to preparing entities for acquisition through ensuring they meet licensing conditions via uplifts of frameworks and policies. Choosing to return home in 2020, Ross is looking forward to supporting FourthLine’s clients as they face into current and future risk and regulatory challenges.