by Andy Milsom, Head of Partner Training and Development, BNP Paribas Leasing Solutions
During a recent conversation with a reseller I have known for many years, I was accused, along with everyone else in my industry, of working for an organisation that appears to be continually changing the rules relating to the processing of leasing transactions. The almost retrospective nature of such changes has certainly created problems in otherwise strong business relationships.
Whilst my default response to such criticism tends to be defensive in nature, upon reflction I think my friend deserves something of an explanation. The fact is that since the banking crisis of 2007/2008 the fiance industry has been subject to more investigation and regulation than has ever previously applied, and in many cases changes in policies and procedures have had to be taken with immediate effect, giving us little or no time to provideadvance notice to those who introduce our business.
The regulatory body for the banking, insurance and leasing industry is the Financial Conduct Authority (FCA), an organisation which has been in operation for only two years. It was formed specifially to address concerns that the fiance industry had not been subject to adequate control and as a result had indulged in a number of very poor practices. These included the rigging of LIBOR and FOREX markets by the banks; the mis-selling of fiance products to an unsuspecting public (e.g. PPI); and not taking suffiient measures to prevent money laundering.
It is important to see all that has been happening over recent months in the context that we are now operating under the watchful eye of a new and very powerful regulator. The FCA’s remit is to prove that it has taken all possible action to ‘clean up’ the fiance industry. To achieve that objective it is possible that a degree of over regulation might be applied, but the banks and associated businesses are in no position to complain and have felt it necessary, and rightfully so, to act very quickly to any guidance coming from the FCA.
There are three main areas controlled by the FCA that must be addressed by leasing companies:
- Licensing and the authorisation of consumer credit business;
- Treating customers fairly; and
- Anti-money laundering policies.
At BNP Paribas Leasing Solutions, we recognise that much of the regulation coming from the FCA might seem to be a bit of a minefild, especially for our partner network whose core business is selling business equipment solutions, not fiance.
We have recently developed a training seminar designed to give our reseller partners a comprehensive understanding of the FCA regime and how it impacts their business when referring a client for a lease application. It also covers the FCA authorisation process and explains the different licence categories to help partners comply with the new regulatory environment. If you’d like to fid out more about this service, feel free to get in touch with me.