Fuse launches Health Signals to help lenders prepare for Consumer Duty with 61% turning to external expertise

Fuse has launched Health Signals, a vulnerability and arrears monitoring product which uses transaction data to help lenders and banks to prepare for the Consumer Duty.
Fuse launches Health Signals to assist lenders in meeting the new Consumer Duty
  • More than two-thirds (67%) of lenders don’t think they've been given enough FCA support ahead of incoming changes.
  • Fuse today launches its new Health Signals product to support lenders in meeting new compliance requirements.
  • Health Signals provides lenders with insights to measure vulnerability, predict arrears risk, and monitor the impact of financial products on borrowers.

AI powered transaction analytics firm, Fuse, has launched a new product, Health Signals, to help risk and compliance teams to measure financial vulnerability, predict arrears risk, and monitor the impact of financial products on their customers. 

This product will provide lenders with much-needed compliance support as more than half (55%) of lenders admit to being unprepared for the upcoming Consumer Duty, while six in ten (61%) say they’ll have to bring in a third party to provide support and guidance.

Health Signals automates vulnerability monitoring by analysing customer transaction data (via Open Banking or existing transaction data) and providing institutions with the insights needed to proactively monitor, report, and predict financial vulnerability. 

This empowers firms to ensure better treatment of vulnerable customers and provide rapid support to those at risk of falling into arrears, which is particularly important when considering nearly a third of lenders (32%) have seen an increase in customers defaulting on their payments in the last 12 months, with a similar proportion (29%) reporting an uptick in the number of borrowers asking for support.

To support firms with vulnerability detection, Health Signals assigns customers with a Vulnerability Score, which takes into consideration their level of vulnerability and likelihood to enter financial harm. The scores are ranked in priority of those who are most in need of intervention, allowing firms to see in one glance which of their customers are most in need of support. 

Insights provided by Health Signals benefits organisations in the following ways:

  • Support them to meet the upcoming Consumer Duty (amongst other compliance requirements) and predict vulnerability and arrears before they occur.
  • Test product portfolios to ensure no group or individual is underserved.
  • Offer personalised products and services based on the unique characteristics a customer may exhibit, and ensure communications are tailored to the particular needs of people’s financial and/or living situation. 

Fuse is working with leading high-street banks to implement the Health Signals solution in preparation for the upcoming regulation deadline.

The Health Signals module, created with Fuse’s proprietary dataset as a lender through the Pave app, has been built to proactively identify a range of vulnerability characteristics, including over indebtedness, unstable employment, recent bereavement, and potential debt spirals. 

The FCA’s new Consumer Duty, which comes into force at the end of July 2023, requires firms to not only act to deliver good customer outcomes, but to understand and evidence whether those outcomes are being met, as well as ensure fair outcomes for vulnerable customers. It’s widely accepted as a positive move in improving consumer protections, with more than three-quarters (77%) of lenders believing that the new rules are the first step in a long journey to improving borrower outcomes.

The vulnerability characteristics that Health Signals has been trained to detect are based on FCA criteria, to support financial institutions to comply with the new regulation, and monitor the impact of financial products on consumers, taking action where needed to support customers.

Sho Sugihara, CEO and Co-Founder of Fuse, comments: “The UK financial system is in urgent need of systematic change if the financial health of consumers is to be at its heart. The Consumer Duty stands to be a powerful catalyst to kickstart this change, and it’s essential that banks and other financial institutions are well supported with the technology and expertise needed to adapt successfully to the new regulations. 

“Health Signals offers unique insights into consumer vulnerability, providing firms with the tools needed to better understand their customers and boost consumer protection. We’ve developed Health Signals in collaboration with some of the UK’s most recognisable banks, ensuring the platform proactively monitors the impact of financial products. This approach represents the future of global finance, and offers unparalleled consumer protections whilst unlocking access to more affordable financial products, and building a fairer financial system for millions across the UK.”

The Health Signals platform is highly-scalable, easily integrated with an organisation’s current systems. The algorithms have been trained on over 400 million proprietary data points collected specifically for retail lending, including transactions, lending decisions, and credit reports. 

Click here to book a demo of Health Signals.