Fair value in consumer finance

This publication highlights both exemplary practices and common shortcomings in how firms assess, evidence, and monitor fair value. For compliance teams, this serves as a timely reminder to review existing fair value frameworks, ensuring they are robust, evidence-based, and aligned with PRIN 2A.4 and FG22/5. Firms should proactively identify gaps, enhance monitoring, and document rationale for pricing decisions.

The FCA's risk-led approach signals continued scrutiny, with potential for supervisory intervention where outcomes are poor. Executives should consider this a strategic priority, as demonstrating fair value not only mitigates regulatory risk but also builds customer trust and competitive advantage. Key actions include conducting thorough fair value assessments, improving data collection, and fostering a culture of continuous improvement.

This is not new rulemaking but a clear indication of supervisory expectations; firms ignoring it do so at their peril.