“Self serve” motor finance the best route to compliance, says iVendi

Self-serve motor finance is proving the most effective route to Consumer Duty compliance, iVendi has reported.

Rob Severs, senior VP ftproducts and insight at iVendi, said: “When the FCA first unveiled Consumer Duty, we looked at ways to achieve compliance using our technology. It quickly became clear that having a self-serve journey for customers would probably be the most suitable solution – and that is proving correct now that we are seeing dealers adopt these measures in practice.

“What self-serve allows you to do is define a carefully structured digital journey that you effectively know is compliant and contains no obvious weaknesses – and that is equally true whether customers are online or in the showroom.”

The alternative, he said, is to allow a degree of human intervention in the process, introducing a wide range of variables that could result in non-compliance.

Severs added: “For the biggest dealers, who have dedicated F&I staff, that approach might be a possibility but even then you’re asking people to have knowledge of perhaps hundreds or even thousands of motor finance product combinations. How can you expect that person to fulfil FCA Article 12 and choose the best outcome for an individual?

“Self-serve means you can demonstrably meet the requirements of the FCA’s four outcome areas and three cross cutting rules, minimising the chances of mis-selling, while creating a clear digital trail that can show compliance if you are challenged.”

A further advantage for dealers, Severs added, is that the amount of work that Consumer Duty created for dealers on a day-to-day basis was reduced to a minimum.

He said: “If you are attempting to use a human-based process, then there is a huge amount of information to record for every motor finance deal that you make and this would have to be done manually, noting every step of the process. Self-serve removes this need.

“In fact, based on what we are seeing in the market, the real question is not to ask why dealers should self-serve but what they are using as an alternative? We see very few instances where other methods look set to produce the same level of compliance. Research from Deloitte suggests that only a maximum of 5% of UK car buyers carry out their motor retail journey entirely online, so what are dealers providing in the other 95% of instances and how are they ensuring that Consumer Duty is being met?”