FCA authorisation, AR oversight, and BNPL updates: Tips from the expert in retail Compliance

Explore essential insights into FCA authorisation, AR oversight, and the latest updates on BNPL regulation with retail compliance expert Phillip Garlick and Matthew Westaway, CEO and Co-founder of Voyc

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If you are an appointed representative or a principal firm, or if you are looking to become FCA regulated and care about keeping your business compliant, this podcast will help you get insights into:

FCA Authorisation Application:

  • How the FCA authorisation application process has changed post-Consumer Duty
  • What information is needed to become authorised and where is the best place to start
  • What external support can firms leverage to help prepare their application
  • Common mistakes firms make in their applications


Appointed Representatives:

  • Responsibilities that Principals have around compliance and oversight of their ARs
  • Why it’s important for principal firms to monitor customer interactions of their ARs
  • Possible consequences of inadequate AR oversight and monitoring



  • The importance of FCA approval for financial promotions in the BNPL space
  • Current BNPL trends and future regulatory changes
  • Best behaviours for firms to prepare for the evolving BNPL sector

[Music] welcome I am Matthew Westwaye  and I’m joined by Philip Garlik  who is the managing director of product Partnerships welcome Phillip welcome to the show thanks Matthew thanks for inviting us so Phillip today we’re gonna have a really interesting discussion around authorization FC authorization we’re going to look at appointed representatives and then we’re also going to look at buy now pay later Philip you’ve been operating in the space for a long time do you want to perhaps give the viewers a bit of a background into who you are and how you came into this role today yeah we’ve only got an hour though Matthew yeah I’ve been in financial services businesses now for over 30 years so usually at The Lending end of the spectrum um so I guess in many ways I’m p a turn Gaine keeper now where I’m on the compliance side uh but compliance has always been part of the DNA of every business I’ve worked in so has a lot of synergies with the The Firm that now and product Partnerships as you know we’re an outsourced compliance company that support a number of firms both lenders Brokers and such like well pH of 30 years I didn’t um I didn’t realize as long as that you really don’t look your age very kind but I guarantee I am my wife will contest to that so yeah it flies by so so philli if we start off with with the authorization application you’ve been in the industry for for a long time with the consumer Duty coming in and the changes that that’s brought into the sector how have you seen authorization change um well I think the headline news is it’s far more challenging um I mean when you think about the different types of applications that go into the FCA you’ve got limited permissions applications full permissions full permissions lending and then you’ve also got things like change of controllers and variations of permissions so there are different types of permissions but broadly speaking one thing that has definitely changed since the duty came into play is um is more challenging um you’ve got to consider the FCA has always had the premise of being consumer Champions which is quite right and one of their key objectives in their business plan this year and Beyond is protecting consumers so it kind of makes sense as to why it’s more challenging um how that manifests itself though in terms of the application process there’s now a Gateway and that Gateway as the name suggests is sort of a filtration process where the FCA take out bad applications or weak applications so I’m not saying necessarily they would have got through before but it’s far more rigorous now at the start of the process and ongoing thereafter and there are questions that will be asked of the firm and the management of the firm that are quite extensive and for some applicants quite scary uh and so if you’re not accustomed to the language that’s used and the questions that are posed it can be quite a challenging process so very much has changed for the better for the consumer yeah it’s got It’s got more challenging harder questions being asked what are some of these you know tough questions what do you see firms really you know battling to answer is there any specific things that stand out yeah I think there are a number of mistakes that are made by firms but the first thing I’d say is you know I often speak to clients and they they often they understand their businesses very well if I said to you you know tell me about voice tell me about your you could talk for days weeks and months about the wonderful business you’ve created and what it does and everything else and that alludes to what the business plan should look like and quite often firms when you think about the putting their application in just fail to write down some fundamentals what are the financials what is the proposition how are you going to attract customers which customers are you going to attract and it’s getting that down on paper um it’s referred to as the regulated business plan but you know this jargon come quite often scare firms and I think it’s very important just to talking language you understand to start with um and get down on Pur your ideas okay so what do you seeing is that firms will have to put together this regulatory business plan and it’s do they kind of overthink it maybe or it’s just something they haven’t they haven’t done that they know their business so well that they almost forget to put down the obvious stuff yeah I mean you know we handle a lot of applications they protect limited permissions applications for example as the name suggests it’s limited in in nature in terms of scope um they’re usually secondary credit Brokers um that are selling their goods and services and using a finance vehicle to purchase it so buying a fridge from curage for example yeah and and and on that premise it’s you know the same rigor is applied to any firm um more depth is required but it’s very much focused I’ve written down here people proposition um and the actual firm itself so what I mean by that is the FDA are interested in who’s running this business who are you what’s your background Where Have You Been what businesses have you run and ask you some very practical questions there’s some checks to do within that such as DBS checks and Security checks and so on background checks but just talking about who are actually running the business the proposition side of things is just them understanding you bear in mind that Cas officer at the FCA might deal with a carpet company in the morning and a technology company in the afternoon and there are some departments with the FCA expect specializ but generally speaking they need to understand the case officer needs to understand themselves what is it you do as a business and in some instances that’s very obvious and easy to understand if I take green energy for example that’s quite complex and so that it needs telling in a manner that anybody could understand really simple terms and then the firm itself just understanding the structure of the firm and its finances is not sufficient just to say you know we intend doing X thousands of pounds of the revenue over the next five years it need to pin out a balance sheet and a cash flow for the next three to five years and have a wellth thought out plan that goes alongside it um I think a number of areas where individuals when they try and do these applications themselves struggle uh is fairly to disclose certain matters for example so there are certain issues that have to be be disclosed and would be met with some degree of resistance but if you always work on the basis the FC what they want to hear and understand is full disclosure you just don’t keep anything hidden away um that is a you know an absolute sin in any application process is non-disclosure of issues and background information that should be told to the FCA it’s all part of the fit and proper test fantastic that you know writing the business plan in a almost a a Layman language that anyone can understand that a case officer can understand makes me think of the shareholders letters of Jeff beos so they are I don’t if you know this Philip but he writes them with the English grammar level of grade eight so that someone with a grade eight education will be able to understand them um and similar lights Warren Buffett he also writes his shers letters as if they are being read by his believe it’s his grandparents that they can understand them I I can relate to that I I spoke to a client recently and he was struggling with consumer Duty board report for example and I asked said look forget the forget the label just tell me how you deliver good customer outcomes he spent 40 minutes telling me a wonderful story about his customers and the outcomes that he achieves they said right let’s get that down on paper then now and just walk through it together and I think again sometimes some applicants can over complicate matters get lost in the Jaron get lost in the science when in reality it’s just about telling the compelling story uh in a practical manner uh in some language that they would understand themselves yeah and do you spend a lot of your time phip on literally trying to get that essence of what they do in a way that can be understood by the case officer yeah I I think when we support firms they’ll often ask us to do the application for them which is what we paid to do we can’t do it for them we’ll do it with them so we can ask a lot of questions about them ourselves so it doesn’t suffice to have one paragraph or one sentence we need them explain to us what business is about I think we get you know since the duty came into play we get more firms now who have attempted to put an application in and have it withdrawn so quite often the FCA May refuse May approve but they equally could ask the firm to withdraw their application because it’s not quite right and and that withdrawal process usually then they’ve got to start all over again it’s just learning from that what mistakes were made what issues were highlighted and how can we make sure that that doesn’t happen again that leads us to sort of onto the mistake so you you mentioned there that full disclosure often that’s something which which firms don’t do to the best of their ability what are the other mistakes you see firms making well just adding to the the disclosure side of things I mean one common question at the at the moment is around you know previous directorships and businesses that have been operated before you’re allowed to have run a business that for example may have become insolvent but how is that business closed down were any customers detriment as a result is there a pattern of behavior here that’s in a appropriate and it’s just understanding that properly and the FCA want professional people running professional businesses with a consumer in mind and so you know thinking about those disclosures and making sure that things have been rectified and remedied from the past correctly is fine as long as it is disclosed but beyond that you know there are some technical considerations so for example not meeting threshold conditions you know business must be solvent for example might sound obvious but having a good set of financials that says well if you say you’re going to do X pound of Revenue over the next three years have you sufficient Capital to protect consumers and deliver on that plan and there’s more scrutiny around the financials now more scrutiny around the individuals rather than you know is this proposition right for the consumer it’s just how are you going to deliver on it so the bars being raised in ter terms of leadership needed in businesses now to regulated businesses wow so so we looking at sort of the people the proposition and the P you’re seeing mistakes being made on people not disclosing or previous directorships potentially the not having enough Capital to to demonstrate that the business has got legs for the future and and growth um on the proposition do you see any spe specific mistakes being made there yeah I mean definitely having the adequate oversight so a compliance monitoring plan to oversee the activity that’s being conducted is quite key so you might be talking about a firm that has not started trading yet for example they haven’t got these things but what is the plan and and so if the if they’re interacting with customers face to face in a retail environment that’s one thing commonly now with the digital technology growing quite rapidly e-commerce firms are quite common in terms of their proposition uh but then engagement with customers outside of that you know uh over the phone through teams videos chat bot and so on it’s essential that how does the firm demonstrate it’s monitoring that activity it’s appropriate so if there are disclosures that need making to customers have they been made accurately um a vulnerable customer’s been identified recorded and looked after not treated any differently so it becomes far more challenging in terms of how you do that and we’ve embraced reg tech technology yeah in a number of different versions deliberately for that reason not to overtake what human intervention can do but to inform um inform it Phil Philip I I must say and this is something which is not I’m not to to to sort of blow your trumpet here but I haven’t met a firm that has more reg Tech than product Partnerships limited I think you you’ve got every solution Under the Sun to make sure you’re covering everything yeah I think we’ve we’ve embraced a number of different platforms and we’ve got Partners like you got voice and others comentis um vulnerability registration service fingerprint uh there’s a number of firms out there and they’re all part of the toolbox that we give to my compliance team so we effectively say right if we’re going to work with this firm and we’re going to help them oversee the activity how are they engaging with the customer if they’re doing it over the telephone plug-in voice and that call listening software will monitor those calls if you are doing written communication such as CRM campaigns or mass email campaigns how are they being monitored so how are you looking after monitoring these different customer interactions in different media types because that’s the consumer driving that now yeah before it was always good oldfashioned retail many years ago now there’s different mediums that are used to interact with the customers you got to be able to listen to them and you’ve kind of two choices you either use sampling which is the oldfashioned way of doing things it’ll take 10 calls or Mystery Shop retail environment situations and you might have take a sample of 10 but r rly they could all be positive and what this technology is doing now is steering you towards the things you need to be looking at you need to look at yeah but it still needs the human intervention to actually review it um the technolog is just part of the solution can you talk a bit about that what are the changes you’ve seen then as I mentioned you’ve been ahead of the game with all of your reg tech and and fantastic team that you have and the mon resources you have on board to make sure that the software is is is executing accordingly what are you seeing in that space of Regulation so there’s a lot of changes in the principal AR regime uh as you’ve alluded to and if we just talk we support firms that have got AR networks whether that be one five 10 or more um and how those firms approach that AR Network and the demands placed upon those principal firms now by the FCA have changed quite dramatically for some it wasn’t a big shift because they were doing a lot of things themselves for others it was quite a seismic shift um the FCI identified a number of um increasing compant compared to directly authorized firms which is why they made that intervention that that disconnect of overseeing a firm that is not regulated under the permissions of that principal firm had to be better controlled the types of changes that they’ve made well now there is a requirement to conduct deeper due Ence that it’s more about the nature of the regulated activity undertaken so even though that AR that appointed representative is empowered to do certain activity what activity are we talking about what is it in the customer Journey they’ll be doing um the principal firm has got to have adequate oversight now those are just two words the reality of adequate oversight could be quite vast so how much intervention and interaction does the principal firm have with the AR you’ve now got to give 30 days notification minimum to the FCA before any AR goes live which to be fair it should be fairly reasonable I think most firms have got an on boarding process I think firms that were on boarding they quicker than 30 days you know i’ question how much due diligence and setup was being done and and they’ve got certain attestations and reports now to send through to the FCA whereas before there reporting in reg data was part of the wider principal firms reporting and so there was no visibility it’s now reported on the individual Ari level that’s the principal firm has got to report its regulated activity and its AR individually and there have been two from memory what they call section 165 demands for information from the FCA on this so they can start to get under the skin of what are the ARs actually doing and then another quite seismic change for some firms has been the annual report that you got to produce an annual report now that gives a summary of the key risks yeah where you’ve identified potential consumer harm what actions have been taken and such like but I think the biggest thing is just understanding that that principal firm is accountable for the behavior of that AR um that you can’t just walk away from it and say well we’ signed a contract and that’s the end of it uh the complaints that belong to that AR actually belong to the principal firm and so it’s taking it very seriously that it’s the principal firm that’s accountable not the AR they’re being empowered to carry out certain activity philli I was looking at some data earlier on and the amount of supervisory cases by the FCA supervisory Team Four principal firms it’s 50 to 400 % more than non-principal and it varies between General Insurance to retail lending but retail lending is is has got a huge difference the supervisory cases are way more in the principal firms why why do you think that is um well I mean the AR regime is spends different markets so bear in mind you’ve got Cale and Retail markets as well as lending broking and such like mixed in that um so a lot of this data I would argue leans more towards the wholesale Market but harm was identified you’re quite right in some of the retail sectors um I mean I think the key thing is the disconnect that some firms weren’t conducting good due diligence and secondly weren’t monitoring anything in terms of consumer interaction so if the AR for example is interacting with consumers again via telephone via um you know CRM campaigns or whatever the medium might be the different channels then what’s really important is they’re able to Monitor and intervene and and monitor what’s going on in these ARS um and I think you know that disconnect of well we’ve signed a contract and we’ll allow them to carry out their activity but the AR firm doesn’t understand its regulatory responsibilities to the principle um is quite interesting there there was a a survey I believe where they asked a um how much so asked principal firms how much nonfinancial misconduct have you logged I think that was about a year ago the FCA sent out a survey to two ARS to ask him questions about or was it two principles just saw something in the news yeah I mean the FCA started to ask for data around regulated activity regulated Financial activity non-regulated uh Financial activity and non-regulated non-financial activity in other words what’s going on in the AR that’s what they’re asking now and I think some principal firms do a really good job and understanding the relationship and understanding the nature of the business that they’re carrying out but others there is a huge disconnect between what the principal firm understands the AR is doing and what they’re actually doing so what the FCA are now asking is could you tell us more about that non-regulated activity and that’s quite a seismic change for the FCA because the FCA is obviously about regulated activity historically but now under the duty we’re talking about delivering good customer outcomes and so we’re now posing questions about nonregulated activity as well okay so Philip could you just sort of explain to our viewers what is a non-regulated activity what does that look like would that be yeah some examples uh well I mean you’ve got um buy now pay later is a good example of nonregulated financial activity you’ve also got um flexi rental is common in the motor sector for example so under 90 days rental agreements are non-regulated but if that rental agreement is renewed and renewed and renewed and goes beyond 90 days then it suddenly becomes regulated so there’s a lot of activity out there in the marketplace that is potentially hidden as non-regulated when in reality it Behavior says it’s regulated and so the FCA sort of prodding around that and looking at that and just making sure there is no consumer harm and equally with the buy now pay later Market at potentially going to regulate that market now you know that times are changing with some products that were deemed to be low risk low harm uh and we’re happy to be non-regulated activity but now are likely to move towards being regulated activity so it’s understanding what’s going on in the AR okay okay all right so so the FCA is asking ARS what types unregular activity are you doing are you doing any buy now P so you’re doing any of this rental that can supposed to be under 90 days but it’s getting perpetually renewed how is the the FC tackling this unregulated area what powers are they using in terms of B more generally let’s let’s let’s look at let’s look at generally let’s get into Bine our pay later um I think really um with the AR regime it is about understanding the activity that they’re undertaking and again you know in the example of the 90-day rental market which is common as I said in the motor sector yeah um a lot of those Agreements are renewed and so the customer never actually gives the car back so it actually behaves more like a regulated product but that’s an issue in it itself um and sort of poses a number of questions so the entity question in terms of why the FC is asking these questions is just so they can understand what’s going on behaviorally in these markets which might inform their intervention and controls I mean you could in some instances be accused of acting outside permissions for example um but you know generally speaking I think again it’s just making sure the the principal firms understand their responsibility over the AR and understand what activity they’re undertaking because you got to bear in mind again we’re talking about wholesale and Retail markets and in the wholesale Market pensions Investments and such like very different than someone buying a fridge out in know a retail store for example if if if if we look at these permissions and the scope that these firms are operating in especially these ARS why is it important for principal firms to monitor the interaction that the AR are having um well I mean if we start with fos for example the financial umman service so as we know customers can follow a complaints process and during that complaints process can ultimately land in F’s lab so the arbitration of you know we can’t come to an agreement I’m not happy I want to take it further quite commonly now customers will choose to and they’ve got every right to uh go to fors by default um and they haven’t followed a complaints process to start with you can’t stop that behavior and you know the for f are within their right to review that case so coming back to your question it’s useful to know well if that customer made 16 phone calls to complain if the principal firm can access those phone calls and and listen to what actually went on and bear in mind that conversation could have been 15 minutes in length so getting to the actual nucleus of the issue essential and so I think we can triage these situations much more rapidly we can have a deeper and wider understanding of the activity that’s uh the conversations have been had with these customers uh and and it gives more evidence that you know we’ve got control of what’s going on and if you know ultimately it’s been identified that customer um was treated inappropriately and harm was uh identified putting it right you know very quickly you know I think I most firms want to do the right thing and getting that information to the table quite quickly is critical so they can actually make the right decision a right informed decision but then I think you know independent on that the fos case fees now I think they’ve dropped to 650 pounds per case you know it becomes a very costly exercise so Defending Your um compliance process identifying vulnerable customers and such like is a key part of um any oversight that you do with the manner in which you actually engage with customers and for supervision how often do you see principal firms you know doing it is it on an annual basis per the FC recommendation or do you recommend they go in and and and have oversight as to what’s being done on a regular basis it’s definitely risk informed you I mean you couldn’t there isn’t a one answer to that question um so you know from our point of view depending on the level of activity and the risk of any harm to Consumers will inform the types of oversight that’s undertaken but you know we we’re um an external compliance company we do a principal AR audit inspection program we’ll inspect the principal and we’ll inspect the appointed representative and in that program we’re looking for controls between the two so if the principal says oh well we have a meeting once a month and we discuss these key points we’ll then speak to the A and say could I see the minutes of that meeting and what points were discussed so it’s just testing the control between the principle and the AR other fundamental checks you know Financial promotions is a key one so that the AR has no um ability to sign off its own Financial promotions it’s got to get them approved this principle um so is that happening what is that approval process look like is it recorded is it documented uh and what is that vetting process look like so I think it’s he very much informed by the level of activity and the nature of activity that’s undertaken with customers yeah well I will say one thing for for your business is that your oversight happens in seconds so your reviews with all your R Tech is basically in real time always on as opposed to doing a review you know once a month or yeah at least annually what what the value we can add to thms around this as I say before it was about sampling see you only realistically take X number of cases and if as a result of that output it was a positive output you may not look further but if was a negative output you would look deeper and wider um what regex enabled us to do now is look at everything and it drills down to the areas that the human intervention needs to review in more detail so it might look at 10,000 calls but say there’s only five calls that actually need to be Tre ared and then actually in investigating those more thoroughly the there’s something which I also have seen firms underestimate is the amount of time and effort it takes off Senior Management if they get put under a skilled person review so the time and the resources required to respond and work with FCA if you are under that review is immense have you seen something similar yeah I mean it’s not for the farted I mean the powers that the FCA have um you know a second to none you know and rightly so but um Defending Your I find the FC is quite palatable that you can have an interactive can see good process and well documented process and that the intent is to create a good out from for customers then that’s great you know for example if you get large spikes in volumes of complaints and they’re ignoring that’s not good process you know if the board is focused around look there’s a sudden increase in complaints here what’s driving that what’s causing that how do we fix that and getting under the skin of those conversations and getting to the sort of front line is is quite key you you touched on Philip you spoke on the F and we then also spoke her early on about B later on us move the conversation to B do you believe that that’s going to have potential regulation and potentially will that fall under the F will the F then have to expand their own operations yeah I mean look buying our P later has come under the Looking Glass in the past couple of years and rightly so there is in Practical terms nothing to stop my um my daughter for example wandering down the High Street and and building up three four 5,000 the debt to buy now per ler firms and and there’s a real variety of approaches by firms out there some are doing it really well and some aren’t doing it so well your questions um you know very important that there is no timeline at this moment in time for that market to become regulated uh in my opinion it will um but it’s got to go through a number of stages it’s got to go through Parliament um if you look at some of the papers published between the treasury and the FCA I think everybody’s leaning towards that happening but there’s no road map um that’s been published yet that’s just said that there’s a timeline for that to happen that being said what has happened um is dialing up the pressure on firms um to make sure that the financial promotions that are promoting these products are monitored properly and that’s definitely something that’s changed now uh and again quite rightly sir it’s it’s you know speaking about your order I didn’t realize Philip up until you know early on today that I’m you would get if you miss your payment you have a late fee but it’s almost I mean it’s just a another name for interest in a way I mean fees and charges are very important again that should be part of the disclosures I won’t talk firm specific because you know K one of you know the larger firms out there that’s trying to push the right behaviors out into the market and they’re equally a regulated firm in their own rights it’s slightly different but you’re right there are fees and charges I think the biggest thing is that affordability and credit worthiness you know the the buy now pay later products they don’t have the same rigor as a normal loan product we’re all accustomed to being asking a certain number of questions about income and expenditure to work out whether or not you can afford to pay this loan V but when it comes to buy now pay later many of those filters aren’t in place um some firms choose to put them and they have you know they do use credit bureau data to make an informed Choice which is a very positive move forward um but you know I think from the financial promotions point of view and keeping it to my example which I Hope’s not true that my daughter can go out there take on lots of credit such as this it’s it’s kind of from a consumer’s perspective it’s a lovely prodct you know giving me a little bit of breathing space pay it back in 9 months with no additional cost is great but as you say there are consequences to paying L there are consequences to missing that n payment if it is paying nine H and you know the financial promotion needs to make clear what these risks and benefits are all about the plus side there about the bad side as well so what I’m hearing philli is they need to balance the benefits and the risks and just make sure people don’t act on impulse too much impulse buying I think is where the harm is coming yeah I mean look con five rules without getting too technical yeah are relatively explicit so prominence disclosures positioning all these are factors you got to think about in a financial promotion um and you you think from a consumer’s perspective if you read an ad you again get lost in technical sort of review and would you get get from that ad a clear balance between the risks and benefits of that product and if the answer is no then he’s not Ry needs review I I gave carries a call Philip the other day just wanted to find out you know if they if they’re doing any call monitoring so i ph carries and I asked them um I said I have a question um regarding buy I pay later and they put me through to a consultant in the store who answered the phone and said hi I can I help and I said you know I’ve missed the payments what does that mean and uh the lady said I can’t answer that question you need to contact the lender um and I said I was quite impressed because I wasn’t expecting them to say that I thought they would tell me you know different answer or try answer it how how important is it for those conversations to be monitored have you seen a need for that um I mean I think I think it’s a definite positive move forward for firms that operate these products I mean the problem you’ve got with binal pum let’s just describe what we mean by buy our pay latest to be exempt it needs to be under 12 months under 12 pay so 12 payments or less Under 12 months interest free um so classic buy now pay later products and so if it is that that’s an unregulated product so the owners on the firm selling those products is not the same as a regulated Finance product but again I come back to the financial promotions so any inducement to credit does meet the requirements um with regards to you know how it’s presented and that the risks and benefits are portrayed so but coming back to your question about you know monitoring those calls or monitoring that behavior of course it’s a positive move forward I mean I’m finding now that firms are getting ready for what they see as the inevitable you know let’s start acting like a regulated firm even though we’re not let’s put the right behaviors in place so again using credit bu data to make an decision about whether or not you can afford that b um but yeah I think the key is you know listening to those conversations whether they’re over the phone in store or whatever that’s a key part of oversight you know listening to actual conversation with the customer because that’s where you’ll getu arise and and you know this you mentioned kong3 and this you know financial services and and Market Act of 2000 do you believe that is almost I mean that wasn’t designed for for this so it was almost by accident that it’s being able to help the FCA cover the sector no I I agree I don’t think it was designed for that but it does fall under the regime and I think that’s what people yeah I would say forgot but missed so about 18 months ago two or three shot across the BS sent out in dceo letters to firms and this applies to all firms doing buy now PIR later um the merchants of those firms so the actual you know retailer that’s selling the buy now later product which again might be it will be unregulated and the regulated firms that were supposed to be approving these Financial promotions so these rules all apply and as you’ve said Matthew it’s the financial services and markets Act section 21 of that act which now has been um almost used as a as the badge in our industry we’re terrible with jargoning compliance companies but the section 21 approv us um so firms like us approve those financial promotions and you got a mechanic in place that allows firms that produce those products to send their financial promotions through to us to get them approved and then pass them out to their network but moreover that the oversight of those firms now is monitored thereafter there’s all right signing off a financial promotion but how do you know it actually ended up in front of the customer in the right way so that’s changed quite dramatically um and you know there are very few section 21 approval firms out there as I understand uh and the Gateway for applications for firms like ourselves to do that work only opened in the first half of this year so it’s relatively new in terms of being under gret to scrutiny by by the FCA and and Philip if we just have to think of the the retailer just final Point they’ve always been subject to the advertising standards so for them is it not like a bit for both to have to do two things yeah I think what what most Merchants do so what what’s most providers offer is a merchant packs if you’re a retailer and you take a buy now a later product from a lender and you implement their platform they usually give you a merchant pack that says this is approved collateral that you can use to advertise your products now the problem with that sometimes is the interpretation of those rules can be lost and it’s very important that what’s being approved is actually carried out at the front line in front of the customer and it isn’t manipulated changed and the content and intent is is changed in some ways so coming back to your point you’ve suddenly then got the huge vacuum of lots of retailers that no longer that should be having their financial promotions approved by a regulated individual a regulated firm like ourselves um and what they do is they usually get it approved through the buy now pair ler provider and the buy now PA later provider usually come into ourselves so whether it’s circumnavigating through the lender or or directly there has to be a clear audit Trail to say what ended up in front of that customer was approved by a regulated firm and now those regulated firms that were approving those financial promotions have got to be have a separate set of permissions from the FCA as I say the Gateway only open this year for firms like ourselves to submit applications such as that and and and and if I’m correct phip for product Partnerships limited to achieve that level of permission is incredibly difficult I don’t think many firms you might be one of account on one hand maybe that have been selected by the FC with us yeah I mean I interact with various trade associations and I don’t know many firms that do it and we’re a rare breed I suppose in many ways the answer is yes it has been a a challenging process to go through we’ve invested large sums of money in technology to have a platform for these firms to put the financial promotions in to have full audit trail that when the financial promotion lands it’s not just a case of someone looking at it they have to go through an audit checklist and make sure everything has been checked within it and it’s either rejected approved or request for edits there’s no other variant to that and the request for edits has got to come back with the approved version at the end then we’ve got to supply to the FCA on a regular basis how many Financial promotions we’ve approved and to which firms so we got to declare what we’re doing so the full audit trail from end to end has been um scrutinized uh and as I say we’re we’re in a Gateway process ourselves at the moment as there any other firms that chose to apply for this type of work but there’s a sudden vacuum of firms now that need support from an authorized entity to be able to an approved entity to approve these Financial promotions um this is quite a large piece of work really and that I think a lot of firms try to do this in a template way so rather than having thousands of of of financial promotions come through that we can approve a template but you know you got to be careful with templates how much are they going to be changed if you’re just changing the color of the car fine but if you’re changing the um price from you know quite dramatically or the interest rate Chang it’s complete the context has completely changed it needs reapproved so it needs a very slick process well audited and by experience people who understand the rules as well i’ say Philip in in closing we’ve been working together for about two years um I hope you agree we built a solid partnership so as a closing thought can you just share with our audience like you know what led you to choosing call monitoring to to choosing voice uh specifically to ensure the monitoring and compliance of of of your network so I I’ve as I said at the beginning worked in regulated firms now for over 30 years and quite commonly in um large call centers and in those call centers I’m used to seeing Banks of Staff um sat there with headsets on listening to calls all day every day the rise of AI of reg tech technology and platforms like yours they just allow us to get a bigger perspective on what’s going on out there so as I said at the start generally speaking compliance people would be doing sampling and based on the outputs of that sampling they would do more or less but it was just sampling and it can be quite arduous I one of my team Nikki she’s been in the industry now for just me I probably give the game away but a long time um and she’s done nothing but call listening that’s a long time listening to customer conversations but what vo is enable her to do now is she just listening to the conversations that need triaging so rather than the 20 minute conversation it’s now a three minute conversation and we’re listening to the bit that’s important that doesn’t mean to say we don’t listen to the rest of it for context being able to triage those calls very quickly identifying vulnerable customers and picking up complaint scenarios much quicker fantastic and I did see in you know in the in the fca’s note on the change in the AR regime they said if your AR Network expands your staff also have to expand yes they wanted to see a proportionality there and this I guess gives you the ability to have some more you know hands on deck you you have expanded your company massively since we joined but it now makes everyone uh have a multiplier effect yeah I mean you can’t rely on technology alone and I think um that’s not just me talking that’s you know it’s proven you still need to have human intervention from trained people who are skilled in understanding to what they’re looking for but reg Tech has definitely assisted firms and it certainly assists Us in having a wider and deeper understanding of what’s going on and it informs and points the team in the right direction um ultimately we all want the same thing he protecting customers and delivering great outcomes for everybody let’s ended on that protecting customers and delivering our comes Thank You Phillip thank you for your time no problem good to see you Matthew thank you Phillip cheers

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