As we delve into the early months of 2024, the reverberations from the enactment of the Consumer Duty in July 2023 are transforming how automotive firms handle regulated financial products, writes Jonathan Barrett, CEO of Comentis.
Initially met with misconceptions and concerns about its impact, especially regarding customer vulnerability identification, the industry now reports a positive shift. The process, once feared as complex and time-consuming, has proven to be quick, straightforward, and surprisingly beneficial. As automotive companies and clients alike appreciate the detailed vulnerability checks, it’s clear that embracing these measures adds substantial value, creating a more robust and customer-friendly industry landscape.
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July 2023 saw the new Consumer Duty come into effect. The Duty’s requirement to protect customers, including those who are vulnerable, had a fundamental impact on automotive firms providing regulated financial products or services to consumers. The impact was significant for several reasons, specifically because the new regulations required automotive firms to change some of their daily working practices in line with the Duty, but also because some dealerships and funders had misconceptions and needed to consider and embrace new ways of working.
Common misconceptions around the process of vulnerability identification, included car sales professionals assuming that customer assessments would be time-consuming and complex, as well as concerns around the potentially negative impact on their sales process. Many dealerships also feared that ‘assessing customer vulnerability’ could lose them valuable sales.
But as we face 2024 we can see that this picture is very different. In actual fact, what we are now hearing from our clients is that the vulnerability identification process is quick, simple, and most importantly does not impact the sales journey in the slightest. Many have even admitted to us that their customers feel greatly reassured by the level of detail that the sales teams are going into around vulnerability checks. So, we want to reassure the automotive industry that vulnerability identification can have a positive impact and add value to both the automotive firms and their customers.
Jonathan Barrett is CEO and Co-Founder at Comentis
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