The FCA has given lenders the green light to use automated approaches to deal with borrowers in difficulty, but warns that it will be monitoring firms closely to ensure that these are appropriate.

Speaking at a mortgage forbearance webinar on September 30, FCA executive director of supervision for retail and authorisations Jonathan Davidson praised the way lenders have responded to the pressures they have faced during the pandemic.

He said he understood why lenders may wish to streamline their processes for helping customers in difficulty.

Davidson said: “We are hearing from some firms a desire to move from the ‘crisis’ approach taken so far during Covid-19 back to ‘business as usual’. 

“This is understandable, but perhaps it is still rather unclear what the ‘new’ business as usual looks like.”

He went on: “It should go without saying that it remains as important as ever to deliver outcomes that are right for the individual borrowers – rather than adopting ‘one size fits all’ solutions. 

“This has been our mantra for many years – and continues to be so.

“But the sheer number of borrowers that might need help in a short period of time will be a significant challenge. 

“Some firms are proposing to deal with this through approaches which are more automated than we would usually see for mortgage borrowers in payment difficulties, and I hope the guidance has clarified our view on digital solutions.

“But it will be no surprise to hear that we want to see these automated approaches delivering appropriate outcomes, in a way that supports customer understanding. 

“And that more hands-on support is available for those that need it.”

Davidson emphasised the need for clear communications to ensure that customers are signposted to additional support when needed and vulnerable borrowers are identified.

He added: “Where customers do follow a more automated journey we will want them to understand the implications of the option they agree to. 

“You will of course need to monitor the outcomes they receive – so that you can act quickly to fix any issues and put them back in the right position.”