The flag will help with the early identification of borrower vulnerability
Lending criteria database Knowledge Bank has turned on a specialist ‘flag’ to alert brokers when they have searched for an element of criteria that may indicate a client is vulnerable.
The flag will help with the early identification of borrower vulnerability, alerting brokers to the fact that additional questions may be needed to be asked of the client and more care may need to be taken.
The flag activation aims to help brokers get used to what areas to look out for, six weeks ahead of the Consumer Duty rules coming into effect on July 31.
The fintech company said it would also add the flag to the ‘Evidence of Research’ over the next few weeks. This will be highlighted so that there is documented evidence for a broker’s compliance file, which can be provided to the regulator to prove that a Consumer Duty issue was flagged and considered when making the lender recommendation.
The Consumer Duty flag will also help lenders using KB Pro, a Knowledge Bank product that lenders use as their own internal criteria system. It will highlight which areas of their criteria in granular detail are affected by Consumer Duty.
“Consumer Duty will be a significant sea change for both brokers and lenders,” commented Nicola Firth (pictured), chief executive at Knowledge Bank. “The level of care needed when advising clients is definitely increasing a notch.
“One of the most challenging aspects of Consumer Duty is identifying instances of vulnerability as it is far more complex than many of us may realise given the transient nature of vulnerability at various stages and events in people’s lives.
“The Knowledge Bank flag, being visible at the very first stages of a searching for a mortgage will help brokers to be aware of when they need to put additional measures in place at the very beginning of the advice process.”
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