Caroline Walton, chief customer insight officer at Dollar UK, outlines her vision for the company’s transformation of high street branches
CS: Now that Dollar UK has had FCA authorisation for several months, what strategies are you putting in place for new products, or are your current product features something of the new norm for this market?
CW: “At Dollar UK, it is always our priority to serve the needs of our current and potential customers, and we are very excited about our plans for the future. We are continually looking at ways in which our customers can get the most out of their visit to our stores. In direct response to customer feedback, we are transforming all of our The Money Shop stores across the UK.”
“We have invested a large sum of capital expenditure into the complete re-design of our stores as new concept stores, in line with what we see to be the future of high-street consumer finance.
“We have a healthy product development pipeline that is aimed at addressing the different customer segments that we operate in. In particular, a great deal of our attention is focused on reviewing and enhancing our loans proposition as we move forward in the sector.”
CS: What impact has the price cap had so far on your products, strategy, or general ability to serve new customers?
CW: We welcome the price cap as a regulatory measure to make lending more responsible. Since the changes to the regulatory landscape began, we have sought to go above and beyond all regulatory requirements to ensure we become the most trusted operator in the market. This means we charge below the FCA-mandated price cap, and we price loans competitively.
“Lending only to people who can repay is the responsible thing to do and makes good business sense. I want to move to a more generic risk-based pricing going forward – which would take into account people’s credit history and their ability to repay. This would mean customers paying less interest if they are more credit worthy.”
CS: What can you tell us about your view on the size of this market once it has settled post FCA authorisation? How many lenders do you think might be left operating?
CW: “The sector has contracted sharply since the introduction of the new FCA regime – something that we welcome because we think that a consumer finance sector comprised of responsible, professional firms is in the best interest of consumers.
“However, it has turned out that there are more players than the FCA originally expected, which means that, even though there are still companies exiting the market, the market in its final incarnation will be bigger than expected. It remains important that the regulator and other agencies, such as the Illegal Money Lending team, maintain a focus on illegal and unauthorised providers to ensure consumers are protected.
“While most bad actors will exit of their own accord, the role of the Illegal Money Lending Team in identifying and tackling companies outside the scope of the law – those who have no intention of seeking approval – remains crucial.”
CS: What is your strategy for debt sale this year or next?
CW: “We are constantly reviewing the most effective ways to run our business efficiently and debt sale is a subject on our agenda.”
CS: Do you think we’ve seen the last of the regulatory fines in this sector?
CW: “With most of the major players now authorised by the FCA, we hope and expect that we’ve seen the last of the big fines. Some companies may still be in the process of getting their affairs in order, and some settlements may of course be included in that; but overall we want to see a well-regulated market in which fines are the exception rather than the norm.”