Expert has seen an uptick in demand for RIOs
With Consumer Duty just a few weeks away, much of the industry is waiting to see the impact it will have on the market.
Much regulatory capital has been utilised by the Financial Conduct Authority (FCA) in its inception of Consumer Duty, and one expert believes communication will be the best way to manage the transition.
As such, Mortgage Introducer sought to understand the new regulations from a financial underwriter’s perspective.
Introduction of Consumer Duty
Emma Williamson (pictured), head of mortgage origination at Hodge, said she believes that Consumer Duty will be a great thing for the industry.
Williamson said it is vitally important the customer is put at the heart of everything, and while she said most brokers, IFAs and intermediaries already do this as a matter of course, she believes these regulations mean that it is now a requirement, and not a request.
“As underwriters, communication is key and we speak to diligent brokers and intermediaries every day; from those who package up their applications perfectly, to others who need a bit more help in getting the correct information to us in the right format,” Williamson said.
Every touchpoint is important, but she said it is notable that brokers usually prefer to pick up the phone and discuss any issues or complexities. That human touch, Williamson said, helps the process run a lot more smoothly for everyone involved, and she believes Consumer Duty will enhance this way of working.
As a result, Williamson said, following the introduction of Consumer Duty, she expects all moving parts within the mortgage process to be laser focused on the application journey and the documents customers need to be able to understand the product and service.
“We are also seeing positive changes to communications and updates for brokers, so they can ensure their customer is up to date as and when required,” she said.
For example, Williamson said Hodge’s mortgage processing team recently added clearer and more consistent updates for brokers on its new business and contract variations.
Rise of RIOs
“What we are definitely seeing as Consumer Duty draws closer is brokers and intermediaries paying more attention to the RIO mortgage,” Williamson said.
Since the introduction of RIO mortgages five years ago, Williamson said they proven quite popular, but Consumer Duty means they have been coming into much sharper focus. Brokers who may have previously concentrated on equity release, she said, are now talking to underwriters about alternatives, like RIO.
“I have even heard of some hiring RIO experts, so they do not have to refer that work on which is great news for the customer,” Williamson added.
Customer requirements and communication
Williamson said she also believes Consumer Duty will ensure the industry is clear and focused on customer requirements and communication.
“This will in turn make sure we are continuing to listen to what our target market requires, and finding the best way to support them to achieve a mortgage, if that is in fact, the right thing to do,” she added.
The underlying message here, Williamson said, is that Consumer Duty will change things, but she believes for the overall betterment of the industry.
“We are all working towards a common goal, to truly put the customer at the heart of everything we do; we should do all we can to help our customers, and Consumer Duty allows us to balance the risk with doing the right thing,” Williamson said.
How do you expect Consumer Duty to impact the mortgage market? Let us know in the comment section below.
