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SimplyBiz: ‘You can’t build a reputation on what you are going to do’

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SimplyBiz: ‘You can’t build a reputation on what you are going to do’

If there’s one thing in life that’s certain, apart from death and taxes, it’s that that quote by Benjamin Franklin will be used at least once a week by someone writing about financial services.

However, it’s different Franklin quote entirely that’s been playing on my mind this week: “It takes many good deeds to build a good reputation, and only one bad one to lose it.” 

The consumer credit market has put in so much work and come so far over the past 16 months in order to improve, where necessary, its processes and practices with a more rigorous regulatory framework than it has previously known. The obvious reason for this is to fulfil the requirements of the Financial Conduct Authority (FCA), however, there is a less tangible benefit, which is to improve the reputation of a financial sector which has often been judged by its lowest, and least ethical, common denominator. We all know that there were organisations which were operating practices that were at best unconscionable and, at worst, illegal. Ironically, these are not the firms who have undertaken the work and ongoing maintenance of adhering to the rules of the regulator. They have either been wound up or are seeing for how long they can drag out an extremely high-stakes game of hide and seek with the FCA.

This week, a BBC investigation, featuring input from Ed Miliband and the Citizens Advice Bureau, has looked at cases in which it feels vulnerable people have not been sufficiently protected when making purchases from rent-to-own firms. 
I’m not in a position to make an informed comment about this investigation, or the individual cases raised, as the specifics are doubtlessly a lot more complex and nuanced than can be summarised in a few headlines. However, the point I would like to raise is that the reputation of the entire consumer market can be shaken by incidents like these. While it is impossible for you to do anything overnight which will persuade all consumers that regulation and business practices are much improved, and continuing to improve as the FCA learns more about the market, what you can – and absolutely must – do, is make sure that, like Caesar’s wife, you are above suspicion.

Applying to a new regulator, adopting their reporting systems, monitoring measures and compliance framework is hard work, but it is essential that you do so. Meeting the FCA’s requirements AND documenting your processes can take up time that you feel would be more valuably spent with your clients. However, to put it bluntly, if the regulator suspects that you are not meeting the rules it has put in place, in the way that it has outlined, you may find yourself unable to service your clients at all while you are investigated. Or, if the reputation of your firm is damaged, you may find yourself long on time but short on clients.

Fortunately, working with an organisation such as the SimplyBiz Group means that our specialist team will keep you up to date with what you need to do, the practicalities of how to approach it and the regularity with which it needs to happen, so that you don’t have to do it all yourself. If you want help with adapting to FCA regulation and keeping compliant on an ongoing basis, please get in touch with us urgently on 01484 443 424.

Attributed to David Golder, Managing Director, Consumer Credit Centre, SimplyBiz Group

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