Andy Ellis, chief executive of NatWest Boxed, the embedded finance business owned by NatWest, told The Fintech Times why he thinks the rules matter as much for retailers as for lenders, and what a bank-backed model brings to the market.

Ellis’s argument starts with what retailers gave away when they handed checkout credit to third parties. “What retailers have given up is ownership of an important part of customer relationships,” he said. “When you outsource consumer credit, you aren’t necessarily just outsourcing the lending. In many cases, you are allowing another provider to establish its own relationship with your customer at a really important point in the purchasing journey.”

Those providers, he said, “often go beyond simply facilitating that original transaction for the retailer. They have also developed a monetisation model from building a relationship with the retailer’s customers and marketing other services to them.”

Regulation, in his view, has given retailers a reason to revisit that arrangement. “Retailers have never had a stronger incentive to take ownership of the consumer credit experience,” he said. “This regulation has simply created a natural moment to reassess the previous model.”

The rules themselves centre on affordability and customer outcomes. Ellis described the main concern being addressed as Consumer Duty, the FCA’s requirement that firms deliver good outcomes for customers. Providers must now carry out creditworthiness and affordability assessments, give clearer information before an agreement is signed, and give customers a route to the Financial Ombudsman Service if something goes wrong.

Source link