Capco’s Samuel Riordan Advises Firms on FCA’s Motor Finance Redress Plans
Samuel Riordan, Executive Director of Banking & Payments at Capco, shares insights on the FCA’s potential Motor Finance redress scheme, highlighting key steps firms can take to prepare.
“It is highly likely that the FCA will soon launch a consultation on a Motor Finance redress scheme,” Riordan states. “Businesses should take proactive steps now to ensure they are ready for the potential regulatory changes.”
If implemented, the redress scheme would simplify the complaints process, reducing dependence on claims management companies while providing structured and efficient complaint handling. For firms, this presents an opportunity to enhance customer analysis, complaint resolution, and overall customer communication strategies, ultimately improving customer outcomes.
“That said, preparing for a redress scheme will not be plain sailing. In addition to likely causing a spike in operational demands in response to the simpler complaints process, it also brings complexities for firms to mobilise and prepare as they look to comply with the regulator-mandated rules surrounding the scheme.
“While the scheme is yet to be confirmed, firms should view this week’s announcement as an impetus to continue preparations for a redress scheme now to avoid falling short later. A key focus initially should be improving their data quality and data assets to develop their underlying claims management data set; building intelligent models that can compute redress; the management of inbound communications across multiple forms; and as a final step preparing redress operationalisation through ramp up of resources and operational processes.
“Aside from these measures, firms should also consider deploying intelligent technologies to support with redress operationalisation. Such technologies allow providers to reduce operational costs and optimise the customer experience for fair and efficient outcomes. For example, this could include the use of chatbots to capture initial customer complaints, data analytics to size the impacted population and redress amounts through to the use of generative AI and deployment of AI agents to review submitted cases and conclude customer outcomes.
“Further steps could include call transcription, sentiment analysis and vulnerability identification to enable superior customer outcomes and significant operational efficiencies reducing the traditional human resource burden in scaling these sorts of programmes.
“Firms must use this time to think and act strategically. Embracing advanced technologies will both enable providers to manage heightened operational demands and ensure better customer experiences and outcomes, ultimately reducing the resource burden and broader impact to the financial services sector.”