Knowledge Bank, the UK’s most extensive lending criteria database, has today launched a unique ‘flag’ feature designed to help brokers identify vulnerable clients.
The new tool comes into operation six weeks prior to the implementation of the Consumer Duty rules set for July 31st, to allow brokers adequate time to familiarise themselves with key vulnerability indicators.
The innovative flag tool is designed to trigger whenever a broker conducts a search for specific lending criteria that may indicate a client’s vulnerability.
It aims to promote the early detection of borrower vulnerability, prompting brokers to ask additional questions or exercise greater caution.
Over the coming weeks, Knowledge Bank plans to incorporate the flag into the ‘Evidence of Research’. This step will provide documented evidence for a broker’s compliance file, which can be presented to the regulator to demonstrate that Consumer Duty issues were flagged and considered during the lender recommendation process.
The Consumer Duty flag will also assist lenders using KB Pro, a product developed by Knowledge Bank for internal criteria management.
From next week, the flag will highlight specific areas affected by Consumer Duty for lenders’ internal sales teams, underwriters, branch staff, and business development managers.
This development follows the recent unveiling of a report by Knowledge Bank, available to lenders, that tracks the volume and frequency of Consumer Duty-related broker searches and identifies underserved market areas.
This tool will save lenders hours of work, demonstrating best practice and providing valuable insights into the lending landscape in relation to Consumer Duty.
Nicola Firth (pictured), CEO of Knowledge Bank, said: “Consumer Duty represents a significant shift for both brokers and lenders. The required level of client care is set to escalate.”
She continued: “One of the most challenging aspects of Consumer Duty is identifying instances of vulnerability. The Knowledge Bank flag will help brokers be aware of when additional measures need to be put in place at the very beginning of the advice process.
“This will help to protect both them and their vulnerable clients and help brokers evidence that they have done so and give them the ability to save it to their compliance file.”
