News and industry insights

Supporting the Financial Industry in meeting Consumer Duty

By Estatesearch on October 26th, 2023

Ollie Wright, our Head of Financial Institutions Team looks at how technology can help.

Protecting vulnerable people is a particular focus at Estatesearch. Now with the introduction of the FCAs new Consumer Duty principle, we have a unique opportunity to help the financial industry support the needs of its customers. Consumer Duty promotes higher and clearer standards of consumer protection across financial services, and firms must now ‘act to deliver good outcomes for retail customers’.  Committed to helping them meet this principle, we firmly believe that technology can support a best practice approach, particularly for those customers who are considered vulnerable.

Founded in 2018, Estatesearch provides technology and services to legal professionals that help to demonstrate due diligence when dealing with probate and court of protection cases. But in reality, what we do is part of a bigger mission to bridge the communication gap between financial institutions, legal services and the general public. As one of the founders of the Vulnerable Banking Group, we are advocates of Consumer Duty and ensuring that customers are treated fairly.

It is estimated that there are billions of pounds in dormant or ‘gone away’ accounts in the UK. This includes £1.45 billion and rising in banks and building societies, £3.4 Billion in investment accounts, and £640 Million in dormant share registrations. Furthermore, there is thought to be anywhere between £27 billion and £200 billion in unclaimed pension pots and life insurance policies.  Our Financial Profile Service gives executors, beneficiaries, deputies, and attorneys peace of mind through comprehensive, efficient, and demonstrable due diligence in identifying the true extent of their client’s financial footprint. It’s essentially a search of financial records to better understand a data subjects’ connection to one or more financial firms.

Through the process of developing the service, we formed relationships with almost 200 banks and financial institutions in the UK, but the identification and confirmation of data subject profiles is still often a slow manual process. Currently, many financial institutions need to search multiple databases to respond to each request.  Even via email, requests can take around 14 days.

In the first quarter of 2023 alone, we sent over 650,000 legal notices to financial firms, asking them to confirm if they held records relating to deceased subjects or those that had lost mental capacity. This is an enormous undertaking and understandably it places pressure on those firms to react accordingly and confirm whether they have a profile match. We are under no illusion that we haven’t played a part in creating this particular administrative burden, in our constant efforts to educate about the need for profile searching in a law firm’s due diligence process. It’s important to note though, that in centralising the process, financial institutions can now begin to streamline the way that they deal with enquiries and consider how technology can play a part.

Furthermore, now that Consumer Duty is in force, we can begin to tackle the problem in earnest, forming deeper partnerships within the financial space to advance technology adoption and explore new developments that help deliver better outcomes for vulnerable consumers more quickly.

So, where do we start when it comes to meeting Consumer Duty? The answer is fairly simple.

We’ve recently completed development of a bespoke automation tool for financial institutions. This Application Program Interface (API) is ready to be implemented across businesses countrywide, providing firms with an automated data analysis tool.

Records can now be analysed more efficiently, allowing institutions to confirm if they hold financial profiles for the subject and allowing them to respond far more quickly than previously possible. 

Our notices can be pulled through the API straight into the firm’s database, where they can be automatically filtered in relevance to the request. Any cases that require further investigation can be quickly identified and those notices where there is no match are returned back to us with no extra work being created for the firm. Having already delivered the API to two major high-street banks, we have observed improvements in response times and reduced resources required for institutions to respond to notices.

This development supports best practice for financial firms, helping them in meeting Consumer Duty principles and improving outcomes for vulnerable people. 

As a conscientious technology provider, prior to undertaking this development project, we were keen to take steps to understand where our services could sit within the financial industry and what impact we could potentially have. On speaking to the regulators, we quickly realised that there were some common misconceptions that needed to be addressed around access to information when the subject is deceased, specifically in relation to data security and GDPR.

Data security is an ongoing concern for all firms, particularly where data is being exchanged with third parties. Whilst the API doesn’t collect or exchange sensitive data with us, it’s important to note that we have stringent information security measures in place to ensure data protection. Earlier this year, we gained ISO27001 certification and are constantly monitoring and managing potential risk factors for our clients and partners.

If you are reading this as a representative of a financial firm, your organization is already receiving our vulnerable data subject Profile Search notices. We invite you to collaborate with us on this initiative so that we can understand your processes and see where our technology can assist you in meeting your obligations when it comes to Consumer Duty. Please email me at [email protected] for more information.

Originally Published in the Collaboration Network Journal, Issue 15, October 2023

Give us a call today, or send a message and we'll get back to you straight away.

0330 900 1700
[email protected]