Knowledge Bank, a UK database of lending criteria, today 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 is being turned on six weeks ahead the introduction of the Consumer Duty rules, which will require financial institutions to drastically improve their consumer protection efforts.
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.
Knowledge Bank will also add the flag to the ‘Evidence of Research’ over the next few weeks so that there is documented evidence for a broker’s compliance file which can be provided to the regulator.
Nicola Firth, CEO, Knowledge Bank, says: "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."