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The FCA review is an opportunity for dealers
Motor retailers are increasingly vital to the sale of motor finance, says Barclays Partner Finance’s Adam Mepham, and lenders will work with them to achieve better customer outcomes
Q Were the findings of the FCA’s review of motor finance a surprise?
A The interim FCA Motor Report, published in March 2018, pointed to a focus from the regulator on commission structures. The final findings, unsurprisingly, have indeed called out commission arrangements, affordability assessments and disclosure of information, which gives the industry a clear steer on what lender standards are expected. We welcome the review and findings, as ultimately we are working together to provide better customer outcomes. From our perspective, anything which drives greater transparency and, therefore, consumer trust, is a good thing.
Q How has Barclays evolved the way it works with its dealer partners in recent years?
A We made a strategic decision three years ago that our focus would be on the AM250 dealer groups and the largest independents in the UK market. Our approach is to share a close working relationship, helping to create stronger ideas and innovative new strategies. If we are able to provide a relationship where the customer benefits and the dealer benefits, then that is success.
Q Commission disclosure and difference in charges (DiC) products were identified by the FCA as problem areas. What is Barclays doing, or has it already done, in these areas?
A In 2016, we identified that DiC models were no longer fit for the market and since then we have moved away and developed commission constructs that support good customer outcomes.
Additionally, it was clear to us that we needed to apply strong client oversight in the marketplace, so we created a dedicated team reviewing business practices and ensuring standards are met. We are able to take a step back, review with a Barclays lens and use our experience to identify potential improvements. Importantly, this area of our business seeks to work with dealers and support them in developing their systems, controls and approach to offering finance.