Customer experience solutions provider Chordiant has called on lenders to be ready to meet the requirements of the second phase of changes to the UK Consumer Credit Bill, which will include the removal of the GBP25,000 limit. According to the company, although the change will significantly alter the way that banks assess risk, it provides an opportunity for them to improve customer service within the industry.
While existing legislation does not cover consumer credit borrowing of over GBP25,000, changes to the bill, which will be implemented in April 2008, will remove this limit, extending the protections of the act to cover all consumer borrowing.
Chordiant has commented that, as a result, banks must give their customers clearer and more frequent information on the status of their credit account. The company added that, subsequently, consumer credit businesses would benefit from a more streamlined, more targeted licensing system and appeals mechanism.
David Barrow, vice president of vision solution architecture at Chordiant, commented: When offering a loan, a bank’s primary responsibility was to assess the risk that the debt of the loan posed to them. Responsibilities are now being extended and the banks must increasingly consider how much risk there is involved for the consumer. This will result in a marked shift in the way that banks assess risk.
Mr Barrow commented that the changes would provide a chance to rebuild the industry’s reputation, and that institutions should take advantage of the opportunity by offering more relevant and personalized services to customers. Mr Barrow added that improved customer relations would help to secure the trust of the customer, which, in turn, would provide lenders with significant cross-selling opportunities.