At a webinar hosted by the regulator, Jonathan Davidson, executive director of supervision - retail and authorisations at the FCA, warned the regulator was embarking on supervisory work in the coming months, in which it would look at how firms have adapted to the challenges during the coronavirus crisis.
He said: “[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.”
He added: “If we see significant issues, we will intervene.” Though he pledged leniency "where it is evident that firms are trying to do the right thing".
It comes after the FCA outlined last month the next stage of support for mortgage borrowers if they continue to face payment difficulties due to the coronavirus.
Under the measures firms are expected to offer additional support to their customers, such as extending the repayment term or offering arrangements for no, or reduced, payments for a period.
They will also need to signpost borrowers to the necessary support in managing their finances, such as self-help, money guidance or to organisations that can provide free debt advice, if appropriate.
Lenders were already expected to offer borrowers a first or second payment deferral under previous guidance.
Mr Davidson said today that regulatory data had shown that most mortgage deferrals have now expired, or soon will do, and most mortgage borrowers are resuming payments.
But he added: "There will be a significant minority of customers who will face ongoing difficulties through this unprecedented period.
"And we all need to work together so they get the best possible outcomes. We know you have been working hard to develop your plans to support these customers."
Automated approaches
Describing a “significant challenge” presented by the number of borrowers that may need help in a short period of time, Mr Davidson said some firms were proposing to address this with approaches that were “more automated” than would usually be seen for struggling borrowers.
Mr Davidson added he hoped the FCA’s guidance had clarified its view on digital solutions.
The guidance says where a firm offers forbearance through a digital channel, it should ensure that customers can ask for support through a non-digital channel if they want it.
Mr Davidson said the regulator wanted to see automated approaches deliver appropriate outcomes and more ‘hands-on’ support available for customers where necessary.
He also said where customers do follow a more automated journey, the regulator would want them to understand the implications of the option they agree to.
Mr Davidson told firms: “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.”
Moving away from a ‘crisis’ approach
Mr Davidson said the regulator was hearing from some firms a desire to move away from the ‘crisis’ approach back to ‘business as usual’.
While he said this was understandable, Mr Davidson added it was still unclear what the ‘new’ business as usual looked like, with the coronavirus affecting many aspects of customers’ lives in “different ways and at different times”.
He continued: “Many borrowers will be facing a loss of income, over differing durations - and solutions may need to reviewed regularly as their circumstances change.
“So, we are all moving into new territory, and may need to continue to live in a world of shifting sands where new circumstances and new challenges arise on a regular basis.”
chloe.cheung@ft.com
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