As
the governance, risk and compliance bandwagon rolls on, and the ongoing need to
evidence suitable ‘Know Your Customer’-oriented processes, so the Mortgage
Market Review (MMR) consultation paper arrived in late December.
But
for the typical IFA, what does it mean to day-to-day processes and workflows?
Following the MMR, the ability to build and assess a full and complete profile of
a potential borrower in order to ascertain the risk to the lender becomes a
necessity. And rightly so.
After
all, squeezing interest rates and deposit thresholds in order to mitigate
against the damage caused by unexpected losses will only get the lender so far
in the current economic climate.
Know
Your Customer is increasingly being about understanding the risk of potential
customer’s appetites. However, lenders should be aware that when MMR
legislation is blended with Anti-Money Laundering legislation will surely mean
that it is only a matter of time before there is a high profile case where the
lender is seen to be misleading borrowers. As a result, the manner in which
documents are created, edited, stored and presented is absolutely crucial – in
fact, business critical.
Brokers,
wealth managers and other investment houses are increasingly putting systems in
place to ensure that relevant checks are not only being made with regard to
records, content and document management, but that also provide financial
organisations with security against auditors and any potential customer
complaints.
As
with much of corporate best practice, it is considered a nice-to-have until
legislation insists upon it. Well, in the case of IFAs and best practice
document processing, that time has surely arrived.
