March 2020
By Mike Underwood, Sales Director at Bridging Vat
Here at Bridging Vat, our view regarding this industry hot topic is fairly simple; yes. The term “Regulation” is normally accompanied by a sigh, with reference to more compliance, more processes and ultimately, more cost.
However, if you really understand the purpose of regulation, then surely it is something that should be welcomed into an industry where vast sums of monies are transacted every day and lives and society are changed for the better, and sometimes for the worse. It does not take long to review the “deal done” announcements via online magazines and social media platforms to get a feel of the size and mobility of an expanding industry. And while associations such as FIBA do a great job in educating and raising standards, would it not be a good thing to have an industry-wide regulatory benchmark?
Regulation is a process consisting of the making, application, and adjudication of rules governing human behaviour and human social interaction. Whether they are traditional or modern, societies and industries need regulation if they want to survive and prosper. More specifically, it matters who regulates what, when, how and why on the basis of what title, at what costs, and with what consequences.
The current financial regulator, the FCA, state quite clearly that they are focussed on the outcomes for consumers, and that those who work in financial services must embrace the principals of responsibility and accountability, as well as the process. From a specialist lenders’ point of view, we are always trying to achieve a positive outcome for our clients, so that the borrower will recommend and re-use our services. Acting at all times in an accountable and responsible way we believe is a minimum standard when it comes to treating customers fairly and achieving our business objectives.
Discussing this topic with friends of mine who are directly authorised, regulated financial advisors, their view on regulation was not one of “big brother”, but of the benefits to the customer that advice and process across the board was pretty much standardised. Regulation to them also meant that each customer facing company had similar structures, similar processes and roles and responsibility. Each company had different products and providers, but the customer journey was relatively the same and therefore best practice can be widespread. This gave a sense of professionalism, accountability and high standards within the financial services industry.
Myself personally, having worked in regulated roles previously, I understand concerns that some may have on regulation creep. However, now I am very proud to work in the commercial finance sector. I believe that as an industry we provide a fantastic service to clients, giving them access to a wide range of funding options, getting deals over the line to provide new housing, new commercial units and services to the general public. Without the speed and innovation our sector provides, growth would be seriously stunted. So if increased regulation brings with it an increased pride in what we do, greater professionalism and accountability while standardising the customer journey to provide the best outcomes, I am all for it.