Faster payments service launching Tuesday 27th May

The final week of testing has been completed prior to the launch of the Faster Payments scheme and consumer advice has been issued.

The Faster Payments Service, which includes standing orders, is the banking industry’s response to Government concern that the UK did not have a low cost, quick and efficient electronic payment mechanism.

With just a few days to go until the launch of the new scheme, APACS, the UK payments association, has issued new materials to help customers wishing to benefit from the service, as it begins its rollout on 27th May.

APACS has produced a new, downloadable advice guide, How to use the Faster Payments Service, along with an online easy-to-use sort code checker www.canipayfaster.co.uk. Customers can input any UK sort code to check whether it is able to receive Faster Payments.

Paul Smee, APACS chief executive said: “The final part of this enormously complex project has been to test the new system in a live environment. This week hundreds of penny payments have successfully been made between the participating banks. The Service is now ready to start being rolled out to customers next Tuesday.

“Although the initial rollout will be gradual, and some customers may not be using the new service immediately, we expect that in the coming months this will ramp up to enable large numbers of customers to benefit from it. After such substantial investment by the industry we’d like, in time, to see the new Faster Payments Service being used for all of the UK’s internet, phone and standing order payments.”

Stephen Ley, a partner in Deloitte’s Enterprise Risk Services practice specialising in payments and retail banking said: “The Faster Payment system will be a challenge for banks which could lead to increased risk of fraud as it will be harder for banks to detect and block fraud in the time window available. The existing process relies, in part, on banks having sufficient time to detect suspicious transactions.

“A number of banks have opted to issue card readers which work with their customers’ debit card to create a more secure authentication and authorisation process. With over 20 million customers regularly using internet banking, increasing online safety is clearly a priority.”

When Faster Payments goes live transactions will be limited to £10,000 for immediate payments and £100,000 for standing orders, although some banks may choose lower limits. In time it is expected that these limits will be increased.

FRSGlobal to announce regulatory reporting solution with Temenos T24 at global client forum

FRSGlobal, the only global supplier of regulatory risk and compliance reporting, with coverage for over 30 countries, will announce the launch of its regulatory reporting solution integrated with Temenos T24 at the annual Temenos Client Forum in Rome.

Temenos, under the terms of the current agreement, plans to develop and maintain the product interface between its T24/Global application suite and FRSGlobal’s FinancialAnalytics regulatory reporting platform. The combined solution is available to international banks and financial institutions.

The annual Temenos Client Forum brings together clients, management, alliance and business partners, industry analysts, potential clients and other special guests from around the world. This year the event is being held at the Rome Marriott Park Hotel.

FRSGlobal provides 1500 financial organisations – including 41 of the top 50 global banking institutions – with enterprise risk and regulatory compliance reporting solutions that enable them to increase operational efficiency, reduce costs and mitigate risks.

Roy Barnes, Alliances Manager, FRSGlobal says “We continue to increase our market share amongst banks who are looking to improve their international reporting capability, which is becoming an even greater imperative in the current climate.

“We are particularly pleased to figure as a Referral Partner to Temenos, who are consolidating their position also as the leading supplier of core banking software solutions in several sectors of the banking industry. The partnership has been created to enhance the Temenos solution offering to banks in the tier one, multi-country market and is complimentary to their existing TFR regulatory reporting solution for the smaller institutions.”

Building societies look to online channel

Over half of the UK's building societies are planning to introduce an online savings channel in the next year in a bid to attract and maintain customers during the current economic gloom.

According to a survey of executives at building societies by Nordic IT services outfit TietoEnator, only a quarter of building societies questioned already offer online savings services, but around 55% of respondents are planning to introduce the channel within the next 12 months.

TietoEnator says this is in direct response to the key challenge that building societies are facing of securing funding by attracting and retaining savers. Over 87%of survey respondents said introducing an online savings channel is "important", with 26% stating it is "crucial".

Half of those questioned fear savers may move to other providers in order to take advantage of services such as online savings accounts.

Commenting on the findings, Adrian Coles, Director-General, Building Society Association, says: “Building societies have always been keen to innovate in order to deliver what their members want. Online savings are no different and I'm sure we will see substantial development over the next 12 months.”

Credit scores go online for free

Credit ratings for more than 1.5m companies in the UK are now freely available following the launch of an online reviews directory. BView, which has been live for a month, lists the details of more than 2.3m trading companies, including credit ratings, customer reviews and scores on quality of service and reliability.

Unlike opt-in business directories and review sites, companies cannot remove their profiles and the interactive nature of BView means that individuals can search through league tables of businesses ranked by their customers.

The credit information has been provided through credit reference agency Equifax and is updated every month, according to Brad Liebmann, founder and chairman of the web portal. He hopes the site will become the "Wikipedia" of commercial data, promoting good practice and exposing rogue traders. "We are taking information that is opaque and exposing it. This level of transparency is the only way forward for UK businesses," he said.

However, not everybody is convinced of the benefits with some observers saying it could do more harm than good. "The guise it is in at the moment, it’s dangerous," said Ron Bidwell, group credit manager for Bridisco. "A lot of the information from what I’ve seen looks really out of date, more than a month old, so you’ve got companies on there that are said to be financially stable when in reality they’re not."

He added that the accuracy of the information posted is questionable and could easily be skewed. "People are quicker to reprimand than praise so it is 20 times more likely you’ll get someone saying something bad than good," he said. "Also, who’s to stop me registering under 20 different names and slagging off all my competitors?"

Liebmann said it will only remove any reviews or comments that are obscene and malicious in intent but aims to mitigate against people trying to manipulate ratings by weighting the value and influence of reviewers. "We accept that not all businesses will like being up there and that we could either be loved or loathed," he said.

With businesses ranging from sole traders to limited companies, he added that the site will create a level playing field for everyone, regardless of how big or small the marketing budget is. Every business has a free profile but can take out a premium membership at £149 per annum for added benefits such as a web link and logo.

Professor Andrew Burke of Cranfield School of Management, whose area of expertise is small to medium sized enterprises, believes the portal will radically transform the dominant economic model. "The site encourages innovation as businesses now need to be more competitive and responsive to customer needs, thereby strengthening the UK economy," he said.

Recession is looming, admits IMF

2 April 2008

The International
Monetary Fund today raised the spectre of outright global recession, blaming the
worst financial crisis in the US since the Great Depression.

In a hugely
pessimistic internal document, the IMF cuts its forecast for global economic
growth in 2008 from the 4.1% it predicted in January to just 3.7%.

'The financial shock
that originated in the US subprime mortgage market in
August 2007 has spread quickly, and in unanticipated ways, to inflict extensive
damage on markets and institutions at the core of the financial system,' the
report says. 'The global expansion is losing momentum in the face of what has
become the largest financial crisis in the US since the Great Depression.'

The paper, obtained
by Bloomberg News at an event for Asian ministers and central bankers in
Vietnam, said there was a 25% chance global growth would drop to 3% or less this
year and next - a pace the IMF described as equivalent to a global recession.

Mortgage approvals fall 40 per cent, says BoE

Mortgage approvals
have dropped 40 per cent from a year ago, with lending now at its lowest level
for 13 years, according to stats from the Bank of England.

The number of loans
approved for house purchases fell to 73,000 in February, with remortgaging
falling to 111,000. Figures released by the BoE also show that equity withdrawal
is now at its lowest level for three years.

It says that equity
withdrawal in the last quarter of 2007 fell by 33 per cent compared to the
previous three months. It was down by nearly half on the same time the previous
year. Figures also show an increaser in total net lending to individuals in
February to £9.8bn, which was above the increase in January and the previous six
month average.

Liberal Democrat
Shadow Chancellor Vince Cable says: “It is becoming increasingly clear that the
downturn in the housing market is much more than just a blip. As the credit
crunch continues to restrict lending and with many people saddled with masses of
personal debt, a dramatic fall in mortgage approvals was
inevitable.”

He adds: “As house
prices continue to fall and mortgage costs rise, we are in real danger of
returning to the woes of the Tory recession with large numbers of families
suffering negative equity and repossession. The Government must act now to
prevent mass repossessions which will only worsen this housing
crash.”

Nationwide switches to SAP for Banking

The UK's Nationwide Building Society is migrating its banking, savings and mortgage operations to the SAP for Banking platform as part of a £300 million business transformation programme.

German vendor SAP says its technology will streamline core processes, reduce costs and improve turnaround and processing of applications and transactions.

The building society, working with technology partners Sap, IBM and Capgemini, will implement the technology in a phased programme, focusing initially on current accounts before moving on to savings, mortgages and branch systems.

The SAP platform will replace systems supplied by Unisys and Fujitsu. Darin Brumby, divisional director, business systems transformation, Nationwide, says Sap for Banking will provide the building society the flexibility to adapt and respond to unseen future changes and advancements in the industry.

"Not only will it enhance our speed to market with products, it will also improve the overall customer experience with the society while reducing costs," says Brumby. Thomas Balgheim, SVP, global banking line of business, SAP, adds: "SAP's banking specific solutions are built upon a flexible and scalable platform that provide the foundation for addressing the many challenges faced by financial services providers today, from increased competition and value adding customer services, to the demands of regulatory compliance and managing new growth opportunities."

The SAP deal is part of Nationwide's six year, £300 million, programme to revamp branches and improve Internet and telephone banking services, which began in 2004.

Small societies restrict lending

The turmoil in the financial markets has led several small building societies to restrict or even halt fresh mortgage lending.

The Bath and the Earl Shilton have withdrawn all their deals, except those at their standard variable rates. Three others - the Newbury, Melton Mowbray and the Tipton & Coseley - are only lending to local people.

All have been swamped by demand but have found funds hard to come by on the financial markets.

The Bath building society admitted it had temporarily run out of money to lend. "Wholesale money is difficult to get and we have come to a standstill at the moment," said a spokesman. "We are hoping it will just be for a month, but we have taken on so much [new business] we have just run out of money to lend at the moment."

The Tipton & Coseley said the fact it was still offering 95% mortgages meant it had been attracting interest from customers unable to obtain mortgages elsewhere. "We were getting a lot of calls from around the country and we wanted to make sure that people locally can get them," said the society's Chris Martin. "Lenders are withdrawing rates and increasing them and limiting the percentage they will lend on.

"We are a bit loath to do that and it is to make sure we don't have to that we are restricting borrowing to people in our area," he added.

he drying up of funds in the financial markets has already led to the crash of one of the country's biggest mortgage lenders, Northern Rock.

But the effects of the crisis are turning out to be more widespread. All lenders are now much more cautious about who they will lend to - both to their public customers and also to professional ones in the financial markets. That has led directly to the disappearance of mortgages worth more than 100% of a property's value. And some lenders are now reluctant to lend more than 90%.

The Council of Mortgage Lenders has already warned that the "mortgage tap" could be turned off this year. Lenders expected to fund a third of their lending by borrowing from other financial institutions on the financial markets, but this source of funds has now dried up.

The economics consultancy Capital Economics - which has long argued that the housing market in the UK was a bubble waiting to burst - warned that the drying up of funds might lead to a downward spiral of falling house prices this year.

Fixed rate mortgages 'are the key'

The Chancellor unveiled plans to persuade homebuyers to take out longer term fixed-rate mortgages and to help key workers on to the housing ladder.

Mr Darling thinks fixed rates lasting up to 25 years will bring stability to the housing market, and protect homeowners from the payment shock of seeing their interest rate suddenly shoot up.

He also launched two shared ownership schemes which would allow key workers such as nurses and teachers to pay for a mortgage, initially covering just half of the property value. They will be offered a low rate loan for the rest of the value until they can afford to buy a bigger share of their property. This is the latest version of a failed government scheme which helped only 451 people into new homes, at a cost of £350m.

However, this scheme will allow borrowers to shop around for the best deals, and should be simpler to arrange. In a further boost, these borrowers will not have to pay any stamp duty on their home until they own at least 80 per cent of it.

Normally buyers must pay 1% of the price on homes worth upwards of £125,000, 3% above £250,000, and 4% over £500,000. The Government is also desperate to encourage UK homeowners to take out longer-term fixed rates. Of the one million plus mortgages taken out in the UK last year, only three per cent were for fixed rates of ten years or longer.

This compares with around half of all mortgages taken out in the U.S. and France. The problem with the UK model is that when borrowers come to the end of their mortgage term payments can rise suddenly because interest rates have increased since they last took out a loan.

This is when homeowners can start falling behind with their monthly repayments and risk being repossessed. The Chancellor believes that if borrowers had fixed rates lasting ten, 20 and 25 years then families would have the security of knowing what their repayments would be.

Yesterday he set out proposals to encourage banks and building societies to pool data on how many borrowers repay their mortgages early and what charges they have to pay. He hopes that by looking at the example of long-term fixed rate mortgages in other countries the banks and building societies will be able to find a way to charge a smaller early repayment penalty.

British homeowners are not keen on long-term fixed rates because of the penalties for quitting.

BUDGET 2008

For example, a borrower with a long term fixed rate could pay an early repayment charge of as much as 7% of the amount they have left to repay - £9,100 on an average £130,000 mortgage.

David Hollingworth from brokers London & Country says: 'It is extremely difficult to plan for what is going to happen 25 years or even ten years down the line. Borrowers like the idea of long-term stability but don't want to be trapped for the long-term.'

Gravity packager software

The developer of packager software system Gravity is looking to set up a whole of market sourcing system to rival Mortgage Brain and Trigold.
Called Orbiter, it will offer sourcing, processing and online compliance services.

The system is being developed by software firm Oppono, creator of packager processing and sourcing system Gravity, which has been running for two years.

It plans to roll out a whole of market solution by the end of 2008, allowing it to offer what it calls a one-stop shop market proposition.

Bank of Scotland International selects BancTec Mortgage Origination solution

BancTec Ltd, a leading provider of transaction processing solutions to the banking and financial services marketplace today announced Bank of Scotland International has chosen its eFIRST Origin solution.

The BancTec solution, eFIRST Origin, will allow Bank of Scotland International to optimise the performance of its multi-currency mortgage application processing operations and significantly decrease the time it takes to process mortgage applications. The implementation of eFIRST Origin provides Bank of Scotland International with a fully integrated web-based solution that will manage applications for offshore mortgage products; from customer enquiry all the way to completion and drawdown.

James Gairdner, managing director, Bank of Scotland International said, "We look forward to working closely with BancTec to ensure customers continue to receive the high quality service they have come to expect from Bank of Scotland International."

James Silcock, business development director - EMEA at BancTec said, “We are pleased to have been selected by Bank of Scotland International to provide their next-generation mortgage system. This is the first time eFIRST Origin will be used within a multi-currency loans environment and we are looking forward to working closely with them to ensure all mortgage illustrations will be accurately generated, controlled and documented as part of Bank of Scotland International’s rigorous approach to compliance."

FSA fires out warning to advisers ahead of March TCF deadline

The FSA has sent out a warning to advisers ahead of its March Treating Customers Fairly deadline suggesting a third of firms have not got the correct systems in place to test TCF.

In its newsletter to financial advisers, sent out today, the FSA says between September and December 2007 it carried out visits to 50 adviser firms to review process for giving advice, including management information. A further 50 firms were mystery-shopped.

Although the visits are still being analysed, the FSA says around a third of firms were not actively analysing and using management information they had gathered to review their processes and test whether they were treating their customers fairly.

The newsletter says: “It was disappointing that, in spite of producing some form of MI including Key Performance Indicators, so many firms failed to consider these on an ongoing basis as part of their monitoring of advising practices. In addition many firms did not adequately consider findings from their review of customer files as part of their MI.”

The newsletter also highlights a recent review by the FSA into whether firms are doing enough to ensure appointed reps are treating their customers fairly.

It found a number of issues with the 35 firms who participated including firm’s own written procedures not being followed in practice, too much reliance placed on the remote checking of client files and poor progress with treating customers fairly.

The newsletter says: “Whilst the results for the financial adviser sample were somewhat better than the other sectors, there are over 1,300 ARs conducting business of behalf of small financial adviser firms. Firms need to ensure the ARs they recruit are fit and proper and that their customer facing staff have the necessary knowledge and competence to advise customers.”

Stroud & Swindon opens new contact centre

Stroud & Swindon
has officially opened its new contact centre in
Gloucestershire.

The contact centre
was officially opened by the Mayor of Gloucester Harjit Gill and the welcoming
speech was made by Stroud & Swindon chairman Laurence James. The contact
centre, which will initially house 40 Stroud & Swindon employees, has an
overall capacity of 110.

Fitted with state of
the art telephony systems, Stroud & Swindon claims the centre will offer an
even higher level of customer service.

Stroud & Swindon
contact centre manager Gina Pearce says: “We have been based in Gloucestershire
for over 150 years and it was imperative to us that our new offices remained in
the area, as opposed to moving elsewhere in the UK or even abroad as other
institutions have done.

“Stroud &
Swindon is a committed employer in the local community, and considers
Gloucestershire and the Southwest its heartland. The new contact centre not only
allows us to provide a better service to our customers, it also gives us room
for expansion.”

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Debt consolidation may be anti-TCF

Financial advisers
should think twice before suggesting consolidation to indebted clients, a debt
mangement advisor has warned. TCF Debt Solutions says that unless advisors
include alternatives to consolidation in their advice to clients with debt
problems, such as individual voluntary arrangements or wider debt management
solutions, they may fall foul of the Financial Services Authority's Treating
Customers Fairly regulations.

Andy Moody, chairman
of TCF Debt Solutions, says: “We need to move beyond a consolidation mentality
as advisers.

“Consolidation has
helped many customers but for a lot of clients it can be argued that taking on
more debt is just forestalling an inevitable move into greater problems that can
lead to bankruptcy."

He adds: "The
question will then be whether the intermediary assessed the client correctly at
the outset, and the FSA will expect to see that in keeping with treating
customers fairly the client was fully aware of all the
options.”

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Prime lending is dominant in UK, says IMLA

Prime lending continues to dominate the UK mortgage market, says the Intermediary Mortgage Lenders Association. Despite prevalent fears over sub-prime lending in the US and at home, IMLA says prime and self-cert residential lending remain the majority.

It says this applies to loans generated both via the intermediary sector and direct to consumer.

IMLA says it has collated estimates of 2007 mortgage volumes split between direct and intermediary business. Its research shows specialist lending represents 30% of all lending and that the intermediary sector handles more than 90% of specialist business.

Peter Williams, executive director of IMLA, says: “Specialist, intermediary lenders are often associated with sub-prime, buy-to-let and other forms of specialist lending. “But we mustn’t overlook the fact that significantly more prime business is handled through intermediaries than direct - £140bn for intermediaries compared with £115bn direct.” He adds: “Even so, non-conforming business does represent around 30% of the whole market and as much as 40% of intermediary business.”

Williams believes it is important to recognise that non-conforming lending is not all sub-prime.

IMLA’s research shows the market share of self-cert and sub-prime activity declined slightly last year, while equity release remained a very small proportion of the market at well under 1%.

The association says UK sub-prime lending represents 6% of the market, as opposed to 20% in the US. Williams adds: “Intermediaries handled in excess of £230 billion in 2007, according to our calculations.

“Even in a slower market, based on projections for the size of the market in 2008, they will still be looking at substantial levels of activity in the current year.”

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Peer calls on NR to abolish Together mortgage

A Liberal Democrat
peer has called on the chancellor to ban Northern Rock from offering its 125%
LTV Together mortgage.

In a debate in the
House of Lords, Lord Newby the Liberal Democrat spokesperson for the Treasury
called on Labour peer Bryan Davies, Baron Davies of Oldham to get the chancellor
to abolish the product.

Newby says: “Does
the minister agree that one category of loans doomed to fail from the start is
that where the loan value, from the outset, is significantly greater than the
value of the house?

"Will he therefore,
through the chancellor, instruct the current management of Northern Rock, to
stop offering its Together loan?” Lord Davies replied saying that Northern Rock
is a private company that takes private decisions.

He added:
“Government anxieties about Northern Rock are acute, and it will be important to
take action in the very near future.”

In the same debate
Labour peer Lord Borrie also called on Lord Davies to consider taking criminal
prosecution against those that offer loans to people that are unable to pay them
back.

Borrie says: “Loans
are being given that are doomed form the start because the individuals to whom
they are given have quite inadequate means to pay them back.

"In those most
serious cases, would not the power of deterrence be of great value by the wider
use of criminal prosecution, which could have a great meaning across the board
if some well-publicised cases were brought?”

But Davies responded
by saying that although it was aware of the dangers in this area, particularly
on the sell-and-rent back arrangements, it was tightening up its regulatory
regime of these types of products. A spokeswoman for NR says that it has no
plans to abolish its Together product.

She also disagrees
with the comments made by Lord Newby, adding that the product offers 30% as an
unsecured loan and it is only 95% that is secured against the
property.

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B&B boss confirmed as CML chairman

The Council of
Mortgage Lenders has appointed Steven Crawshaw, group chief executive of
Bradford & Bingley as chairman for 2008.

Crawshaw succeeds
Jon Pain, former managing director of Cheltenham & Gloucester.
Mark Parsons,
managing director of home finance at Barclays and Richard Brown, managing
director of personal lending at Bank of Ireland have been appointed deputy
chairmen. Crawshaw has held his role at B&B since March 2004, and began
his career as a litigation solicitor.

Since joining the
banking sector he has held positions at Cheltenham & Gloucester, Lloyds TSB
and B&B. Crawshaw says: “While the fallout from the liquidity crisis has
been well documented, let’s not forget the strengths of the UK mortgage
marketplace.

“The UK boasts a
competitive and innovative mortgage market which currently helps over 11.8
million households.”
He adds: “Looking
ahead, 2008 will be an uncertain year for the mortgage industry and lenders will
continue to respond to funding constraints. But it is entirely possible that the
market will recover sooner than expected.”

Crawshaw says one of
the CML’s main challenges for the year ahead will be making sense of the
aftermath of the 2007 events and ensuring policymakers and commentators are
accurately informed on the market environment as it evolves.

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First-time buyers face soaring mortgage costs

Average mortgage
costs to income for first-time buyers are now higher than levels at the 1990s
housing boom peak, says the Building Societies Association.

First-time buyers
were devoting nearly 35% of their income to mortgage costs by the third quarter
of 2007, compared with the previous high of nearly 34% in 1990, the UK Housing
Review indicates.

The Review by the
Chartered Institute of Housing and the BSA, published today, shows increasing
numbers of households are moving into private rented housing.

It says a
sharp rise in house prices and mortgage costs over the last decade contrasts
with the pattern of private rents, which have kept pace with earnings.

This has resulted in
substantially lower rents than mortgage costs.

The Review attributes
rapid growth in the private rented sector to competitiveness of private renting,
as opposed to owner-occupation and the greater choice available to households
seeking such housing.

Steve Wilcox, professor of housing policy at the
University of York and author of the review, says: "Private renting has become
far more competitive as an option for households compared to the cost of buying.

"The sector has
grown by 21% in the last five years across the UK and is fulfilling a
significant role in the housing market."

Adrian Coles,
director-general of the BSA, says: "With first-time buyers finding it
increasingly difficult to get a foot on the housing ladder, the private rented
sector is providing good quality accommodation to increasing numbers of people."

www.mortgagestrategy.co.uk

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Packagers start to woo traditional lenders

Many packagers are striving to get more balance sheet lenders on their panels to minimise the impact of the credit crunch on business.
Last week, Praxis Mortgages re-vealed that it was adding Scarborough Specialist Mortgages to its panel and it is hoping to add CHL Mortgages on October 8.
Dudley Aldous, director of sales and marketing at Praxis, says: "Traditional lenders with their own funding streams are bringing much-needed stability to the sub-prime market."
Steve Field, managing director of Niche Mortgage Solutions, says the packager is in discussions with balance sheet lenders and has recently added BM Solutions to its panel.
He adds: "Until recently, packagers were at a disadvantage if they didn't have a wide range of securitising lenders on their panel. But the power has shifted to balance sheet providers."
Packagers are continuing to struggle as the credit crunch continues to bite business volumes. Last week, John Rice, managing director of the Regulatory Alliance of Mortgage Packagers, said applications to packagers were down 35%. He also forecast redundancies of 20% to 30% in the weeks to come, with packagers' income falling by up to 60% by Christmas.
Consultant Brian Pitt adds: "Firms that have been scraping by on small margins and high overheads will sink. No more than 50 packagers will survive this credit crunch."

FSA to crack TCF whip in 2008

The Financial Services Authority is set in 2008 to grill all 3,800 mortgage brokers in a bid to speed up the take-up of its Treating Customers Fairly initiative.

The regulator is also looking to focus on failing firms that need the most attention and debunk the myth that smaller firms are below the FSA’s radar.

Across the financial services spectrum, the FSA will be conducting mini-assessments with a whopping 18,000 advisers. Out of these, it says 25% of these mini-assessments will be followed up by a full assessment.

Mandy Spink, head of mortgage and credit unions at the FSA, says: “As everyone knows, the March 2007 deadline didn’t do particularly well. Only 41% of advisers implemented TCF and this was actually only 22% when you looked at mortgage firms.

“This strategy is about increasing the amount of contact with small firms, helping brokers embed TCF and focus on those that need regulatory attention.”

The FSA will be undertaking a major recruitment drive to bolster staff levels so it can undertake the TCF review.

Spink adds: "This is also a way of myth busting that firms are not under our radar. We would like to be in a position in giving as much help as possible to those engaging with us so we can focus as much as our resources on those that are not