Commenting on the Financial Conduct Authority’s (FCA) statement to consult on the next steps for Payment Protection Insurance (PPI) claims, Tim Howarth, regulatory partner at KPMG said:
“Any deadline will introduce short-term pain and long-term gain for the banks. In the short term, a deadline is likely to put pressure on the banks’ claims handling departments and raise operational cost. Although there would be a spike in enquiries as a result of the proposed consumer communication campaign, the bulk of claims have already been processed.
“In the long-term, the deadline will allow banks to move on, reduce provisions and plan for the future.
“The narrow scope of the Plevin case review outcome will provide some comfort to the banks. While the 50 percent commission threshold will impact the banks, the real impact will lie with brokers. Banks already have strong claims handling processes in place. Brokers on the other hand, should take note and look at the effectiveness of their claims departments.”
“It will be interesting to see whether the Plevin case becomes a precedent. If so, there could be a significant impact on the insurance industry, which is already under significant regulatory and market pressures.”
KPMG’s most recent bank benchmarking report revealed that in 2014, although conduct costs for the ‘Big Five’ UK banks are falling, it still remains high at £9.9bn. Almost half of this cost, £4.7bn, was provided against PPI claims.
- ENDS -
Simon Chan, PR Assistant Manager, KPMG
T: +44 (0)207 694 2024
M: +44 (0)7747 564 737
KPMG Press office: +44 (0)207 694 8773
Follow us on twitter: @kpmguk
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.