UK Financial Conduct Authority portfolio letter for credit reference agencies and credit information service providers

The U.K. Financial Conduct Authority published a portfolio letter setting out its supervisory strategy for credit reference agencies and credit information service providers. In the letter, the FCA sets out its priority areas for the next two years, which relate to:

• embedding the consumer duty—the FCA has concerns that the process of raising a data dispute or complaint can be difficult for consumers to navigate. As such the FCA intends to undertake work to understand complaint practices across the portfolio and what actions firms have taken under the duty to improve outcomes. The FCA will also continue to assess how firms are meeting the price and value outcome;
• cyber resilience—firms should have a forward-looking outlook and remain vigilant to technological advances and emerging threats to be able to anticipate potential system vulnerabilities. Firms should review the systems and controls, oversight, and monitoring arrangements that they currently have in place to ensure they are sufficient to identify weaknesses and vulnerabilities;
• financial resilience—firms should undertake regular reviews of the adequacy of their capital and liquidity to ensure that they have the financial resilience to withstand a range of stress-tested scenarios. Firms should proactively engage with the FCA as soon as possible if emerging liquidity or capital risks are identified in their business; and
• credit information market study—once the new Credit Reporting Governance Body is established, the FCA expects firms to support its work. Firms should consider whether the information they are providing to consumers on the availability of statutory credit reports meets the FCA's expectations under the consumer understanding principle of the consumer duty. The FCA expects to publish a consultation paper on FCA rules relating to mandatory data sharing in due course. Firms are expected to consider how the issues raised in the letter apply to their business and act as necessary.

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