As the UK experiences rising interest rates to a harsh 5% base rate – the 13th consecutive rise since December 2021 – it becomes imperative for Quality Assurance and Compliance Managers to understand the implications for finance products and their responsibility in upholding Consumer Duty through quality assurance.
Let’s explore the effects of rising interest rates on financial products and how Compliance and Quality Assurance Managers can navigate these challenges within the contact centre.
Rising Interest Rates and Mortgage Rates
Quality Assurance managers in financial services contact centres need to be aware of the direct impact of rising interest rates on mortgage rates, and how this impacts the consumer.
Banks and building societies are meeting Chancellor Jeremy Hunt as pressure grows on them to help people struggling with these rising mortgage costs. As interest rates increase, mortgage lenders face higher borrowing costs, which are then passed on to borrowers in the form of increased mortgage rates.
Martin Lewis, MoneySavingExpert founder, had already warned that a mortgages “timebomb” had now “exploded” in the UK.
It is vital for managers to understand these dynamics to effectively address customer concerns. The cost of living crisis is amplified due to these interest hikes, putting consumers under immense stress and pressure to keep up with payments so, ensuring empathy and providing accurate advice is crucial and ensures compliance with applicable regulations.
Consumer Duty and Financial Responsibility
With rising interest rates, compliance and quality assurance managers must guide contact centre agents through emphasising Consumer Duty and financial responsibility to customers. Homeownership in particular entails financial obligations, and it is crucial to educate customers about the potential impact of rising interest rates on their mortgage repayments. Encouraging agents to provide clear and transparent information on affordability assessments, stress tests, and potential rate increases can help customers make informed decisions and take responsibility for their financial well-being. Where re-payments become unmanageable, agents should be able to provide resources for consumers to seek additional support.
Quality Assurance in Financial Products
Quality assurance managers will play a pivotal role in maintaining quality across the sale of these financial products, especially during periods of rising interest rates. It’s all about focusing on the best outcome for the consumer. By providing agents with the necessary training and resources, managers can ensure that customers receive accurate and transparent information regarding the effects of interest rate fluctuations. Increasing conversation coverage through Auto-QA will also ensure more accurate QA assessments can be carried out, giving a true view and flag any potential risks during customer interactions.
Regulatory Compliance and Consumer Protection
Compliance managers also have a critical role to play in upholding regulatory compliance and consumer protection. They must stay updated on the latest regulations and guidelines related to mortgage lending practices, responsible lending, and consumer protection – such as Consumer Duty. By implementing robust monitoring compliance managers can ensure that contact centre operations align with regulatory requirements and protect customers from predatory behaviours.
Equipping contact centre agents with the necessary knowledge, training, and resources, managers can ensure that customers receive accurate and transparent information about the effects of interest rate fluctuations while adhering to the new Consumer Duty regulation.
Here are 3 things you can do today to get ahead in your contact centre:
- Download our Consumer Duty Scorecard to implement in your QA process. If you’re an Evaluagent customer, this is available to you in-platform.
- Watch our recent webinar on Consumer Duty and Quality Assurance to understand how to navigate regulatory compliance in the contact centre.
- Access our guide on How to Develop A Successful Quality Assurance Framework to deliver real improvements to your QA process, your team, your organisation AND your customers.
Want to learn more – book a demo with our team today.