It is impossible to have missed the Financial Conduct Authority (FCA) long-awaited new consumer duty rules, published recently.

Regulated firms, who have always maintained a responsibility to treat customers fairly, are now facing more explicit expressions of consumer care from the regulator. The course is set for more focus on borrower outcomes.

Of course, how this care is implemented is one thing but how it is monitored and measured is another. The quality of the data held by lenders and advisers will underpin the quality of the service they are ultimately able to prove they have provided.

Of particular interest are the rules around firms acting in good faith, avoid causing foreseeable harm, and enabling and supporting retail customers to pursue their financial objectives. These obligations apply during the whole lifecycle of a product, and at every stage of the customer journey. They are very much less transactional in nature but about ongoing welfare. With regard teh transaction and product itself, the regulator wants all products and services for consumers to be designed to meet the needs, characteristics and objectives of a target group of customers (including those with characteristics of vulnerability) and distributed appropriately.

Not all of these aspirations are new but the focus on outcomes is distinctly different. Currently, lenders collect vast swathes of data for making lending decisions, but it is almost all concerned with whether the loan should be made or not. Behavioural, geo-demographic and other environmental data (I don’t for once mean ‘green’ though that will continue to grow in importance) may need to inform a decision to lend to a level that affordability data currently does. This is not a plea for Open Banking by the way. The industry can drown itself in the wrong type of data! Lenders do not need more reasons to not lend. But it is a call for some serious consideration of not only how data is manged but the purpose it is fulfilling in the first place.

A comprehensive borrower view is the end goal. Good data governance throughout the value chain will offer the control and access that will support the regulator’s focus on outcomes. Ultimately secured lending is more complex because the property is part of the rationale for providing the loan.

As we know the data available to us here is vast and needs proper consideration. With the inclusion of the property comes many opportunities to make a different decision that can improve or negatively impact the borrower’s outcomes.

The outcomes required for consumer credit do not involve this added layer of complexity and so a focus what is right for the borrower is, on one level at least, less complex.

The technology blend and ability to move swiftly to deliver these changes and access the right data will be important. Our own Lender Hub offers a gateway to do this but before we get ahead of ourselves, we all need to understand what data sets will be required and how they will be implemented to improve the decision-making process for lenders and their borrowers.