In our 2023/24 Business Plan released today, we outline how our areas of focus for the year will include financial resilience and digital journeys, alongside our ongoing work on the prevention of authorised push payment (APP) scams.
Emma Lovell, Chief Executive at the LSB, comments: “The cumulative upwards creep of inflation, prices and taxes present a longer-term issue for individuals and businesses. Even at the point that inflation is predicted to be brought under control later in 2023, the cost of everyday life is unlikely to reduce and will likely ‘reset’ to a higher level.
“We will all, individuals and businesses alike, need to adjust to a new economic climate of higher prices and we are urging bankers and lenders to join us in our renewed focus on preventing customer harm.”
Supportive digital journeys
Much of the our work acknowledges that banks and lenders need to work with customers in a bespoke manner when they are vulnerable or facing financial difficulty. However, this has become more challenging as customers increasingly engage via digital channels. These channels can bring massive benefits in terms of convenience and user experience, but can also make it more difficult to spot vulnerable customers and those entering financial difficulty, and to provide appropriate support.
In 2023/24, we will undertake a thematic review of this issue across firms registered to the personal and business Standards and the anti-scam Contingent Reimbursement Model Code (the CRM Code). The review will assess how digitised and data-driven customer interactions are impacting customer outcomes – and where lessons can be drawn for both registered firms and the wider industry.
Preventing financial difficulty
Support measures for personal and business customers facing financial distress is an area of emphasis for both the LSB and the financial services industry over the coming year.
We will be undertaking a significant project cross-cutting both the personal and business Standards that considers the data and metrics available to firms to identify and assess customers at risk of financial difficulty. We will also investigate how firms can use this data proactively to mitigate the risks of financial distress, and to reduce the impact when a customer does fall into difficulty.
The conclusions will be shared with registered firms to ensure that they are prioritising the protection of customers facing increasing financial distress.
The future of the CRM Code
The CRM Code is currently the only form of protection for customers which specifically addresses the prevention and detection of, and response to, APP scams. Outcomes for customers have demonstrably improved since the introduction of the Code in 2019 and its oversight by the LSB.
We recognise that the role and focus of the Code will change as the Payment Systems Regulator (PSR) finalises its rules around compulsory reimbursement over the coming year. We will work closely with the PSR, Pay.UK, firms and stakeholders during this period.
We believe there should remain an independent standards framework for firms capturing the conduct elements of the CRM Code, even once the PSR has introduced new requirements on reimbursement, to ensure work to prevent scams remains the top priority.
In 2023/24, we will also conduct roundtables following the development of guiding principles for firms resulting from our recent research work in respect of the effective warnings provisions of the Code; make updates to the Information for Practitioners; and continue to share best practice and insights in relation to the Code.
Emma comments: “The prevalence and increasing sophistication of fraud and scams looks set to continue. Cross-sector collaboration beyond the financial services industry and a common understanding of the opportunities available to all sectors to protect individuals from fraud are also key to achieving a reduction in successful scams and avoiding the devastating impact of such crimes on customers.”
The LSB’s 2023/24 Business Plan & Budget can be read in full here.