19 October 2015
The announcement that a PPI deadline could be imposed for claims has shocked some people, but other financial industry experts are unsurprised. In recent times, there has been a shift away from regulatory authorities being combative in their approach to the banks, and are now seeking collaboration.
This is because they say, much has changed since the mis-selling of payment protection insurance (PPI) broke all those years ago. Many people predict that such a thing will not happen again, because too much has changed.
What are these changes and why are people feeling more confident?
The predecessor to the Financial Conduct Authority (FCA) was the Financial Service Authority (FSA) a body that many people felt could only ever really pay lip service when there were issues within the banking sector. The FSA had no real power and rather imposing change, could only recommend it.
The FCA on the other hand, was described as the FSA but with teeth. It meant that it could make recommendations and impose change. It was also combative, to a certain extent, in its style when it first came in to being, with the head of the FCA, Martin Wheatley, determined to bring banks into line.
Martin Wheatley resigned in the summer of 2015, having felt that he had not only served his time but that the regulator needed a different approach now that some of the tough work had been done. His successor has yet to be appointed but, the Treasury are looking to the financial markets across the world for a potential replacement.
To a certain extent, the consumer has had a wakeup call. The banks of old, the bank that knew its customers and looked after them for the longevity have now been replaced by slimmer, leaner banks with one eye on their profits, rather than on their customers.
Banks are now in a market place themselves where lack of or low profits makes them vulnerable to take overs. But, this does not mean that they could or should ride rough shod over customers.
For many years, with no one noticing their confidence in their wrong doing grew to the point that they believed that their practice was actually in the favour of their consumer and them.
Thankfully, this attitude and practice has changed but it has been a forced step change, with some huge fines for some banks for wrong-doing. However, the tope layers of management are being replaced with new people and thus, attitudes are changing even more.